Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 29, 2018 | |
Class of Stock [Line Items] | |||
Entity Registrant Name | Bandwidth Inc. | ||
Entity Central Index Key | 1,514,416 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Small Business | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Public Float | $ 416 | ||
Common Class A | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 13,287,851 | ||
Common Class B | |||
Class of Stock [Line Items] | |||
Entity Common Stock, Shares Outstanding | 6,510,731 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 41,261 | $ 37,627 |
Marketable securities | 17,400 | 0 |
Accounts receivable, net of allowance for doubtful accounts | 24,009 | 21,225 |
Prepaid expenses and other current assets | 6,114 | 3,767 |
Deferred costs | 2,630 | 2,633 |
Total current assets | 91,414 | 65,252 |
Property and equipment, net | 25,136 | 14,946 |
Intangible assets, net | 7,089 | 7,643 |
Deferred costs, non-current | 1,828 | 2,068 |
Other long-term assets | 727 | 1,192 |
Goodwill | 6,867 | 6,867 |
Deferred tax asset | 17,359 | 6,526 |
Total assets | 150,420 | 104,494 |
Current liabilities: | ||
Accounts payable | 3,418 | 3,025 |
Accrued expenses and other current liabilities | 21,393 | 15,725 |
Current portion of deferred revenue and advanced billings | 7,912 | 5,768 |
Total current liabilities | 32,723 | 24,518 |
Deferred rent, net of current portion | 2,503 | 716 |
Deferred revenue, net of current portion | 6,424 | 2,549 |
Total liabilities | 41,650 | 27,783 |
Stockholders’ equity: | ||
Preferred stock | 0 | 0 |
Additional paid-in capital | 116,600 | 102,465 |
Accumulated deficit | (7,848) | (25,771) |
Accumulated other comprehensive loss | (1) | 0 |
Total stockholders’ equity | 108,770 | 76,711 |
Total liabilities and stockholders’ equity | 150,420 | 104,494 |
Common Class A | ||
Stockholders’ equity: | ||
Common stock | 13 | 4 |
Common Class B | ||
Stockholders’ equity: | ||
Common stock | $ 6 | $ 13 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue | $ 204,113 | $ 162,955 | $ 152,135 |
Cost of revenue | 108,145 | 89,262 | 85,218 |
Gross profit | 95,968 | 73,693 | 66,917 |
Operating expenses: | |||
Research and development | 20,897 | 10,789 | 8,520 |
Sales and marketing | 20,731 | 11,218 | 9,294 |
General and administrative | 47,588 | 37,069 | 33,859 |
Total operating expenses | 89,216 | 59,076 | 51,673 |
Operating income | 6,752 | 14,617 | 15,244 |
Other (expense) income: | |||
Interest (expense) income, net | 301 | (1,728) | (908) |
Total other (expense) income | 301 | (1,728) | (908) |
Income from continuing operations before income taxes | 7,053 | 12,889 | 14,336 |
Income tax benefit (provision) | 10,870 | (6,918) | 11,094 |
Income from continuing operations | 17,923 | 5,971 | 25,430 |
Loss from discontinued operations, net of income taxes | 0 | 0 | (3,072) |
Net income | 17,923 | 5,971 | 22,358 |
Less: income allocated to participating securities | 0 | 644 | 2,950 |
Net income attributable to common stockholders | 17,923 | 5,327 | 19,408 |
Other Comprehensive income | |||
Unrealized loss on marketable securities, net of income tax benefit | (1) | 0 | 0 |
Total comprehensive income | 17,922 | 5,971 | 22,358 |
Less: net income allocated to participating securities | 0 | 644 | 3,355 |
Income from continuing operations attributable to common stockholders | $ 17,923 | $ 5,327 | $ 22,075 |
Income from continuing operations per share: | |||
Basic (in usd per share) | $ 0.96 | $ 0.42 | $ 1.89 |
Diluted (in usd per share) | 0.85 | 0.37 | 1.72 |
Net income per share: | |||
Basic (in usd per share) | 0.96 | 0.42 | 1.66 |
Diluted (in usd per share) | $ 0.85 | $ 0.37 | $ 1.51 |
Weighted average number of common shares outstanding: | |||
Basic (in shares) | 18,573,067 | 12,590,221 | 11,678,568 |
Diluted (in shares) | 21,140,382 | 14,543,170 | 12,870,632 |
CPaaS | |||
Revenue | $ 164,415 | $ 131,572 | $ 117,078 |
Cost of revenue | 94,296 | 75,859 | 71,218 |
Other | |||
Revenue | 39,698 | 31,383 | 35,057 |
Cost of revenue | $ 13,849 | $ 13,403 | $ 14,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' (Deficit) Equity - USD ($) $ in Thousands | Total | Conversion of Series A preferred stock to Old Class A voting common stock | Class A voting common Stock | Class B voting common Stock | Old Class A voting common Stock | Old Class B non-voting common Stock | Common stockClass A voting common Stock | Common stockClass A voting common StockConversion of Old Class B non-voting common stock to Class A voting common stock | Common stockClass A voting common StockConversion of Class B voting common stock to Class A voting common stock | Common stockClass B voting common Stock | Common stockClass B voting common StockConversion of Class B voting common stock to Class A voting common stock | Common stockOld Class A voting common Stock | Common stockOld Class A voting common StockConversion of Series A preferred stock to Old Class A voting common stock | Common stockOld Class B non-voting common Stock | Common stockOld Class B non-voting common StockConversion of Old Class B non-voting common stock to Class A voting common stock | Additional paid-in capital | Additional paid-in capitalConversion of Series A preferred stock to Old Class A voting common stock | Additional paid-in capitalOld Class A voting common Stock | Additional paid-in capitalOld Class B non-voting common Stock | Accumulated other comprehensive income | Accumulated deficit |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Cumulative effect of change in accounting principle | $ 420 | $ 420 | |||||||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2015 | 710,000 | ||||||||||||||||||||
Series A redeemable convertible preferred stock, beginning balance at Dec. 31, 2015 | $ 21,818 | ||||||||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2016 | 710,000 | ||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2016 | $ 21,818 | ||||||||||||||||||||
Common stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2015 | 0 | 0 | 11,542,158 | 18,590 | |||||||||||||||||
Beginning balance at Dec. 31, 2015 | (19,074) | $ 0 | $ 0 | $ 12 | $ 0 | $ 35,434 | $ 0 | (54,520) | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Issuance of common stock (in shares) | 218,345 | ||||||||||||||||||||
Issuance of common stock | 1,111 | 1,111 | |||||||||||||||||||
Exercise of warrants to purchase common stock (in shares) | 19,472 | ||||||||||||||||||||
Exercise of warrants to purchase common stock | 150 | 150 | |||||||||||||||||||
Distribution of Republic | (28,899) | (28,899) | |||||||||||||||||||
Shareholders’ anti-dilutive arrangement | (324) | (324) | |||||||||||||||||||
Stock-based compensation | 1,884 | 1,884 | |||||||||||||||||||
Net income | 22,358 | 22,358 | |||||||||||||||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 31, 2016 | 11,779,975 | 18,590 | 0 | 0 | 11,779,975 | 18,590 | |||||||||||||||
Ending balance at Dec. 31, 2016 | $ (22,374) | $ 0 | $ 0 | $ 12 | $ 0 | 9,356 | 0 | (31,742) | |||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||||||||||||||||
Conversion of Series A preferred stock to Old Class A voting common stock (in shares) | (710,000) | ||||||||||||||||||||
Conversion of Series A preferred stock to Old Class A voting common stock | $ (21,818) | ||||||||||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2017 | 0 | ||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2017 | $ 0 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Issuance of common stock (in shares) | 4,000,000 | 31,510 | 16,250 | ||||||||||||||||||
Issuance of common stock | 74,400 | $ 94 | $ 109 | $ 4 | 74,396 | $ 94 | $ 109 | ||||||||||||||
Exercise of warrants to purchase common stock (in shares) | 17,260 | ||||||||||||||||||||
Exercise of warrants to purchase common stock | 91 | 91 | |||||||||||||||||||
Stock-based compensation | 1,803 | 1,803 | |||||||||||||||||||
Purchase of common stock (in shares) | (29) | ||||||||||||||||||||
Purchase of common stock | 0 | ||||||||||||||||||||
Conversion of stock (in shares) | 34,840 | 162,991 | 13,586,485 | (162,991) | (13,586,485) | 1,775,000 | (34,840) | ||||||||||||||
Conversion of stock | 0 | $ 21,818 | $ 13 | $ (13) | $ 1 | $ 21,817 | |||||||||||||||
Costs in connection with initial public offering | (5,385) | (5,385) | |||||||||||||||||||
Termination of Shareholders’ anti-dilutive arrangement | 184 | 184 | |||||||||||||||||||
Net income | 5,971 | 5,971 | |||||||||||||||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 31, 2017 | 4,197,831 | 13,440,725 | 4,197,831 | 13,440,725 | 0 | 0 | |||||||||||||||
Ending balance at Dec. 31, 2017 | $ 76,711 | $ 4 | $ 13 | $ 0 | $ 0 | 102,465 | 0 | (25,771) | |||||||||||||
Series A redeemable convertible preferred stock, shares outstanding, beginning balance (in shares) at Dec. 31, 2018 | 0 | ||||||||||||||||||||
Series A redeemable convertible preferred stock, ending balance at Dec. 31, 2018 | $ 0 | ||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Issuance of common stock (in shares) | 330 | ||||||||||||||||||||
Issuance of common stock | 11 | 11 | |||||||||||||||||||
Exercise of warrants to purchase common stock (in shares) | 48,904 | ||||||||||||||||||||
Exercise of warrants to purchase common stock | 37 | 37 | |||||||||||||||||||
Exercises of vested stock options (in shares) | 1,724,689 | ||||||||||||||||||||
Exercises of vested stock options | 11,046 | $ 2 | 11,044 | ||||||||||||||||||
Vesting of restricted stock units (in shares) | 11,000 | ||||||||||||||||||||
Vesting of restricted stock units | 0 | ||||||||||||||||||||
Stock-based compensation | 3,328 | 3,328 | |||||||||||||||||||
Conversion of stock (in shares) | 6,929,993 | (6,929,993) | |||||||||||||||||||
Conversion of stock | 0 | $ 7 | $ (7) | ||||||||||||||||||
Costs in connection with initial public offering | (285) | (285) | |||||||||||||||||||
Unrealized loss on marketable securities | (1) | (1) | |||||||||||||||||||
Net income | 17,923 | 17,923 | |||||||||||||||||||
Common stock, shares outstanding, ending balance (in shares) at Dec. 31, 2018 | 12,912,747 | 6,510,732 | 12,912,747 | 6,510,732 | 0 | 0 | |||||||||||||||
Ending balance at Dec. 31, 2018 | $ 108,770 | $ 13 | $ 6 | $ 0 | $ 0 | $ 116,600 | $ (1) | $ (7,848) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating activities | |||
Net income | $ 17,923,000 | $ 5,971,000 | $ 22,358,000 |
Loss from discontinued operations, net of income taxes | 0 | 0 | 3,072,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 5,824,000 | 5,712,000 | 6,142,000 |
Accretion of bond discount | (164,000) | 0 | 0 |
Amortization of debt issuance costs | 64,000 | 376,000 | 52,000 |
Stock-based compensation | 3,339,000 | 1,803,000 | 1,370,000 |
Deferred taxes | (10,833,000) | 6,168,000 | (11,086,000) |
Loss on disposal of property and equipment | 191,000 | 91,000 | 19,000 |
Impairment of intangible asset | 0 | 0 | 695,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (2,784,000) | (4,387,000) | (4,043,000) |
Prepaid expenses and other assets | (1,926,000) | (1,622,000) | (848,000) |
Deferred costs | 243,000 | (906,000) | (975,000) |
Accounts payable | (169,000) | (2,429,000) | 243,000 |
Accrued expenses and other liabilities | 4,826,000 | 1,040,000 | (813,000) |
Deferred revenue and advanced billings | 6,019,000 | 2,573,000 | 510,000 |
Deferred rent | 2,080,000 | 233,000 | 246,000 |
Net cash provided by operating activities from continuing operations | 24,633,000 | 14,623,000 | 16,942,000 |
Net cash used in operating activities from discontinued operations | 0 | 0 | (11,788,000) |
Net cash provided by operating activities | 24,633,000 | 14,623,000 | 5,154,000 |
Investing activities | |||
Purchase of property and equipment | (12,419,000) | (5,021,000) | (3,831,000) |
Capitalized software development costs | (2,028,000) | (2,942,000) | (2,230,000) |
Purchase of marketable securities | (35,236,000) | 0 | 0 |
Maturities of marketable securities | 18,000,000 | 0 | 0 |
Net cash used in investing activities | (31,683,000) | (7,963,000) | (6,061,000) |
Net cash used in investing activities from discontinued operations | 0 | 0 | (1,311,000) |
Net cash used in investing activities | (31,683,000) | (7,963,000) | (7,372,000) |
Financing activities | |||
Borrowings on line of credit | 0 | 4,000,000 | 56,950,000 |
Repayments on line of credit | 0 | (9,000,000) | (68,950,000) |
Payments on capital leases | (92,000) | (73,000) | (102,000) |
Borrowings on term loan | 0 | 0 | 40,000,000 |
Repayments on term loan | 0 | (40,000,000) | 0 |
Payment of debt issuance costs | (25,000) | (25,000) | (554,000) |
Payment of costs related to the initial public offering | (285,000) | (5,385,000) | 0 |
Proceeds from the initial public offering, net of underwriting discounts | 0 | 74,400,000 | 0 |
Proceeds from issuances of common stock | 11,046,000 | 174,000 | 974,000 |
Proceeds from exercises of warrants | 37,000 | 91,000 | 150,000 |
Cash distribution to Republic | 0 | 0 | (30,000,000) |
Net cash (used in) provided by financing activities | 10,681,000 | 24,182,000 | (1,532,000) |
Net (decrease) increase in cash, cash equivalents, and restricted cash | 3,631,000 | 30,842,000 | (3,750,000) |
Cash, cash equivalents, and restricted cash, beginning of period | 37,870,000 | 7,028,000 | 10,778,000 |
Cash, cash equivalents, and restricted cash, end of period | 41,501,000 | 37,870,000 | 7,028,000 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | 107,000 | 1,535,000 | 1,314,000 |
Cash paid for taxes | 155,000 | 855,000 | 6,000 |
Supplemental disclosure of noncash investing and financing activities | |||
Non-cash distribution of net liabilities to Spin-Off | 0 | 0 | 1,101,000 |
Acquisition of equipment through capital leases | $ 0 | $ 0 | $ 132,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 09, 2017 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 10,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.001 | ||
Common stock, shares authorized (in shares) | 120,000,000 | ||
Common Class A | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | |
Common stock, shares issued (in shares) | 12,912,747 | 4,197,831 | |
Common stock, shares outstanding (in shares) | 12,912,747 | 4,197,831 | |
Common Class B | |||
Common stock, par value (in usd per share) | $ 0.001 | $ 0.001 | |
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |
Common stock, shares issued (in shares) | 6,510,732 | 13,440,725 | |
Common stock, shares outstanding (in shares) | 6,510,732 | 13,440,725 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business Bandwidth Inc. (together with its subsidiaries, “Bandwidth” or the “Company”) was founded in July 2000 and incorporated in Delaware on March 29, 2001. The Company’s headquarters are located in Raleigh, North Carolina. The Company is a cloud-based, software-powered communications platform-as-a-service (“CPaaS”) provider that enables enterprises to create, scale and operate voice or text communications services across any mobile application or connected device. The Company has two operating and reportable segments, CPaaS and Other. CPaaS revenue is derived from usage and monthly services fees charged for usage of Voice, Messaging, 911 and Phone Numbers solutions through the Company’s proprietary CPaaS software application programming interfaces. Other revenue consists of fees charged for services provided such as: SIP trunking, data resale, and a hosted Voice-over Internet Protocol (“VoIP”). The Other segment also includes revenue from traffic generated by other carriers, SMS registration fees and other miscellaneous product lines. Initial Public Offering On November 9, 2017, the Company’s Registration Statement on Form S-1 relating to the initial public offering (“IPO”) of its Class A common stock was declared effective by the SEC. Immediately prior to the closing of the IPO, the Company’s certificate of incorporation was amended such that (i) each share of the Company’s then-outstanding Class A voting common stock (“Old Class A common stock”) was reclassified as one share of Class B voting common stock (“Class B common stock”), which has ten votes per share, (ii) each share of the Company’s then-outstanding Class B non-voting common stock (“Old Class B common stock”) was reclassified as one share of Class A voting common stock (“Class A common stock”), which has one vote per share and (iii) options and warrants exercisable into the Company’s Old Class A common stock and Old Class B common stock became exercisable into Class B common stock and Class A common stock, respectively. In addition, immediately prior to pricing of the IPO, all shares of the Company’s then-outstanding Series A redeemable convertible preferred stock were converted into Old Class A common stock, which then converted into Class B common stock. In connection with the Company’s IPO, 4,000,000 shares of the Company’s Class A common stock were sold at an initial public offering price of $20.00 per share for proceeds of approximately $74,400, net of underwriting discounts and commissions of $5,600. On November 14, 2017, the outstanding term loan of $38,500 was paid in full with proceeds from the IPO. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Reclassification The Company reclassified certain prior year amounts to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit or net income. Principles of Consolidation The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, recoverability of long lived and intangible assets, customer relationship period, valuation allowances on tax assets, certain accrued expenses, and contingencies. Revenue Recognition Revenue consists primarily of the sale of communications services offered through API software solutions to large enterprise, as well as small and medium-sized business, customers and are generally derived from usage and monthly service fees for both the CPaaS and Other segments. Usage revenue includes voice communication (primarily driven by inbound minutes, outbound minutes, toll-free minutes) and messaging communication (driven by the number of messages) that traverse the platform and network. Revenue for these services is recognized in the period the usage occurs. Monthly service fees include the provision and management of phone numbers and emergency services access, which is recognized as the service is provided. In addition, the Company earns Carrier Access Billings (“CABS”) revenue by allowing interconnected telecommunication carriers to pass traffic through its network and, as such the Company is the principal in delivering communication services to such carriers. Revenue for these services is recognized in the period the usage occurs. When required as part of providing service, revenues and associated expenses related to nonrefundable, upfront service activation and setup fees are deferred and recognized over the longer of the associated service contract period or estimated customer life. Revenue recognition commences when all of the following criteria are met (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the fee is fixed or determinable; and (iv) collection is probable. Customers generally enter into arrangements that are typically two to three years in length. Cost of Revenue CPaaS cost of revenue consists primarily of fees paid to other network service providers from whom the Company buys services such as minutes of use, phone numbers, messages, porting of customer numbers, and network circuits. Cost of revenue also contains costs related to the support of the network, web services and cloud infrastructure, capacity planning and management, rent for network facilities, software licenses, hardware and software maintenance fees, and network engineering services. Personnel costs (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services, operation and maintenance of the communications network, customer support, as well as, third party support agreements, and depreciation are also recorded as cost of revenue. Other cost of revenue consists of amortization of capital software development costs related to platform applications supporting non-CPaaS services including circuit costs paid to third party providers, internet connectivity expenses, minutes of use, contractors, regulatory fees and surcharges, depreciation, and software and hardware maintenance fees. Operating Expenses Research and Development R&D expenses consist primarily of personnel costs (including non-cash stock-based compensation expenses), outsourced software development and engineering services and cloud infrastructure fees for staging and development outsourced engineering services. Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including commissions for sales employees and non-cash stock-based compensation expenses. Sales and marketing expenses also include expenditures related to advertising, marketing, brand awareness activities, sales support and professional services fees. General and Administrative General and administrative expenses consist primarily of personnel costs for support personnel and executives in accounting, finance, legal, information services, human resources and administrative functions. General and administrative expenses also include costs related to product management and reporting, data services, customer billing and collection functions, and other professional services fees, credit card processing fees, rent associated with the Company’s headquarters in Raleigh, North Carolina, depreciation and amortization. Cash and Cash Equivalents The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (“RRAs”). RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an “A” (or equivalent) credit rating. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities. Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows: As of December 31, 2016 2017 2018 Cash and cash equivalents $ 6,788 $ 37,627 $ 41,261 Restricted cash 240 243 240 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 7,028 $ 37,870 $ 41,501 Restricted cash is for Automated Clearing House (“ACH”) availability, customer deposits and for credit card security. The Company has classified this asset as a long-term asset in order to match the expected period of restriction and is included in Other long-term assets in the consolidated balance sheets. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. Management has evaluated the collectability of trade accounts receivable and determined that allowances of approximately $32,463 and $906 for uncollectible accounts and customer balances that are disputed were required as of December 31, 2017 and 2018, respectively. The allowance for doubtful accounts as of December 31, 2017 primarily relates to billings for CABS services where collectability was deemed not probable due to prior period customer disputes. Refer to Note 5, “Financial Statement Components,” for a rollforward of the components of the allowance for doubtful accounts as of December 31, 2017 and 2018, and for discussion of the settlement agreement that was entered into in 2018 that resolved the ongoing dispute and litigation with MCI Communications Services, Inc. d/b/a Verizon Business and Verizon Select Services, Inc. (collectively, “Verizon”), which is a CABS customer of the Company. The Company includes unbilled receivables in its accounts receivable balance. Generally, these receivables represent services provided to customers, which will be billed in the next billing cycle. All amounts are considered collectible and billable. As of December 31, 2017 and 2018, unbilled receivables were $8,653 and $11,174, respectively. Concentration of Credit Risk Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances. With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable. As of December 31, 2017, one customer represented approximately 13% of the Company’s accounts receivable, net of allowance for doubtful accounts. As of December 31, 2018, one customer represented approximately 18% of the Company’s accounts receivable, net of allowance for doubtful accounts. For the years ended December 31, 2016, 2017 and 2018, no individual customer represented more than 10% of the Company’s total revenue. Property and Equipment, net Prop erty and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 2 to 5 years Internal-use software development costs 3 years Furniture and fixtures 2 to 7 years Leasehold improvements Shorter of the estimated lease term or useful life Maintenance and repairs are charged to expense as incurred. Deferred Costs The Company defers certain direct and incremental upfront costs related to the generation of a revenue stream or obtaining a new customer agreement. These costs include installment fees, activation and other telecommunication fees. The Company capitalizes these costs and amortizes them over the longer of the term of the customer contracts or the estimated customer life, which is approximately three years. Software Development Costs The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Debt Issuance Costs The Company incurred debt issuance costs associated with obtaining and entering into a five-year Credit and Security Agreement in November 2016, which includes a revolving credit facility and a term loan. These costs include non-refundable structuring fees, commitment fees, up-front fees and syndication expenses, which have been deferred and are being amortized based on the effective interest method over the term of the Credit and Security Agreement. The debt issuance costs associated with the revolving credit facility are recorded as a deferred cost in the accompanying consolidated balance sheets. The unamortized debt issuance costs, which are included in prepaid expenses and other current assets in the accompanying consolidated balance sheets, were $175 and $136 as of December 31, 2017 and 2018, respectively. Debt issuance costs associated with the term loan were recognized as an adjustment of the yield of the loan and were reflected as a reduction of the long-term debt balance. On November 14, 2017, the term loan was paid in full and $260 of unamortized debt issuance costs were recorded as interest expense. As of December 31, 2017 and 2018, unamortized debt issuance costs were $0. Goodwill The Company reviews goodwill and indefinite-lived intangible assets at least annually, as of December 31, for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment at an interim date if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or indefinite-lived intangible asset below its carrying value. The Company tests goodwill at the reporting unit level and has determined that it has two-reporting units, CPaaS and Other. All Goodwill is allocated to the CPaaS reporting unit. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the carrying value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its carrying value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. The Company makes assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine each reporting unit’s and indefinite-lived intangible asset’s estimated fair value. If these estimates or related assumptions change in the future, the Company may be required to record an impairment charge. As of December 31, 2017 and 2018, the Company has recorded goodwill of $6,867. No goodwill impairment charges were recorded for the years ended December 31, 2016, 2017 and 2018. Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and definite lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs totaled $197, $464 and $953 for the years ended December 31, 2016, 2017 and 2018, respectively, which are included in sales and marketing expenses in the accompanying consolidated statements of operations. Commissions Commissions consist of variable compensation earned by sales personnel and third-party resellers. Sales commissions associated with the acquisition of a new customer contract are paid over time, based on monthly revenues, and are recognized as sales and marketing expense in the period incurred. Stock-Based Compensation The Company accounts for stock-based compensation expense related to all stock-based awards based on the fair value of the award on the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, which is generally four years. The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant. The Company uses the Black-Scholes option pricing model, net of estimated forfeitures, to measure the fair value of its stock options. The Black-Scholes option pricing model requires the use of objective and subjective assumptions, which determine the fair-value of stock-based awards. These assumptions include: • Fa ir value of our common stock. Prior to the Company’s IPO, the fair value of the shares of the Company’s common stock underlying stock options has historically been established by the board of directors. Numerous objective and subjective factors that were considered included, but were not limited to, the following: i) contemporaneous independent, third-party valuations of the Company’s common stock; ii) the rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of the Company’s common stock; iii) the Company’s results of operations, financial position and capital resources; iv) current business conditions and projections; v) the lack of marketability of the Company’s common stock; vi) the hiring of key personnel and the experience of the Company’s management; vi) the introduction of new products; vii) the risk inherent in the development and expansion of the Company’s products; viii) the fact that the option grants involve illiquid securities in a private company; ix) the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company, given the prevailing market conditions; x) industry trends and competitive environment; and xi) overall economic indicators, including gross domestic product, employment, inflation and interest rates. After the IPO, the Company uses the market closing price of its Class A common stock as reported on the NASDAQ Global Select Market for the fair value. • Expected term. The expected term was estimated using the simplified method allowed under SEC guidance as the Company does not have sufficient historical data to use any other method to estimate the expected term. • Expected volatility. The expected volatility is derived from an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company, such as the size, and operational and economic similarities to its principle business operations. The Company uses this method because it has limited information on the volatility of its common stock. • Risk-free interest rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group as of the grant date. • Expected dividends. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company has elected to estimate expected forfeitures, and, as such, the Company must also determine a forfeiture rate to calculate the stock-based compensation for awards. Through December 31, 2018, the Company recognized compensation for only the portion of options expected to vest using an estimated forfeiture rate that was derived from historical employee termination behavior. If any of the assumptions used in the Black-Scholes option pricing model change, stock-based compensation for future options may differ materially compared to that associated with previous grants. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that it will not realize some or all the deferred tax asset. Quarterly, the Company reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and the implementation of prudent and feasible tax planning strategies. The evaluation of the recoverability of deferred tax assets requires judgment in assessing future profitability. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination. The tax benefit recognized is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company recognizes potential accrued interest and penalties associated with unrecognized tax positions in income tax expense. Operating Segments Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to make operating decisions, allocate resources and in assessing performance. The Company has two operating segments, CPaaS and Other, which are deemed to be reportable segments. The Company’s CODM is its Chief Executive Officer. The CODM evaluates the performance of the Company’s operating segments primarily based on revenue and gross profit. The Company does not analyze discrete segment balance sheet information related to long-term assets, all of which are located in the United States. All other financial information is evaluated on a consolidated basis. Earnings per Share Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, options and warrants to purchase common stock and redeemable convertible preferred stock are considered to be potential common stock. Historically, the Company issued securities other than common stock that participate in dividends (“Participating Securities”), and therefore utilizes the two-class method to calculate net income per share. These Participating Securities include the Series A redeemable convertible preferred stock. The two-class method requires a portion of net income to be allocated to the Participating Securities to determine the net income attributable to common stockholders. Net income attributable to the common stockholders is equal to the net income less dividends paid on preferred stock with any remaining earnings allocated in accordance with the bylaws between the outstanding common and redeemable convertible preferred stock as of the end of each period. On November 9, 2017, the Participating Securities were converted into shares of Old Class A common stock, which converted to Class B common stock immediately prior to the IPO. Emerging Growth Company Status The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this extended transition period and, as a result, it will not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies. Recently Adopted Accounting Standards In May 20 17, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting , which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation. ASU 2017-09 was effective for fiscal years and interim periods within those years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business , which amends the guidance of FASB Accounting Standards Codification Topic 805, “Business Combinations,” adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance was effective for annual and interim periods beginning after December 15, 2017. The impact from the adoption of this standard is dependent upon future transactions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash , which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company adopted this standard retrospectively and it had no material impact on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810), Targeted Improvements to Related Party Guidance for Variable Interest Entities , which addresses the cost and complexity of financial reporting associated with consolidation of variable interest entities (“VIE”). ASU 2018-17 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied on a retrospective basis as a cumulative-effect adjustment as of the date of adoption. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. This ASU is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, and early adoption is permitted. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which addresses the income tax effects of items in accumulated other comprehensive income (“AOCI”) which were originally recognized in other comprehensive income, rather than in income from continuing operations. Specifically, it permits a reclassification from AOCI to retained earnings for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate resulting from the U.S. tax law changes enacted in December 2017. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the U.S. tax law changes are recognized. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairment. The ASU requires impairment charges to be based on the first step in today’s two-step impairment test. ASU 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2021, and early adoption is permitted. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short- term leases tha |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 3. Discontinued Operations On April 20, 2015, the Company created a wholly owned subsidiary, Republic Wireless, Inc. (“Republic”), which was incorporated in Delaware. On November 30, 2016, the Company completed a pro-rata distribution of the common stock of Republic to its stockholders of record as of the close of business (the “Spin-Off”). Each of its stockholders received one share of Republic common stock for each share of Bandwidth common or redeemable convertible preferred stock held as of the close of business on November 30, 2016. Accordingly, the results of operations, financial condition and cash flows of Republic have been presented as discontinued operations for all periods presented in the accompanying consolidated financial statements. In addition, the Company distributed $30,000 in cash to Republic in connection with the Spin-Off. Accordingly, the net assets distributed to the stockholders in connection with the Spin-Off was $28,899. Bandwidth has not otherwise provided nor does it intend to provide financial support to Republic. Given the nature of the Spin-Off transaction, the equity holders of Bandwidth are comprised of substantially the same individuals and entities that are the equity owners of Republic. The Company determined the equity owners of Republic are related parties of Bandwidth. As described in Note 15, the Company has certain involvement with Republic via ongoing services arrangements, with these ongoing services arrangements creating a variable interest in Republic. The Company assessed the relationship with Republic under guidance for variable interest entities, and because investors in Republic have disproportionate voting rights, the Company concluded that Republic is a VIE. Republic is a provider of Wi-Fi centric mobile services directly to retail consumers. Bandwidth determined it is not the primary beneficiary of Republic, as Bandwidth and its related parties do not individually have power to direct the activities that most significantly impact Republic’s economic performance and power is not shared. Bandwidth’s involvement with Republic involves providing certain support services through the Transition Services Agreement, which does not give it power over key activities. Key activities are directed by the Board of Directors Republic, which require majority approval. Bandwidth does not have direct representation on the Board of Republic and is not able to exert power over its key activities. Bandwidth does not have an implicit variable interest in Republic. Republic is financed primarily through the cash distribution in connection with the Spin-off and its own ongoing operations. The Company’s maximum exposure to loss relating to this variable interest entity is limited to amounts due under the service agreements between Bandwidth and Republic as described in Notes 12, “ Commitments and Contingencies ” and 15, “ Related Parties ” . The Spin-Off represented a strategic shift to Bandwidth’s business. The Company believes that for US Federal income tax purposes, the Spin-Off will qualify as tax-free for Republic, Bandwidth and its stockholders. The Company entered into a tax sharing agreement with Republic that governs rights and obligations after the Spin-Off regarding income taxes and other taxes, including tax liabilities and benefits, attributes, returns and contests. The table below provides the operating results of the discontinued operations through the date of the Spin-Off for the year ended December 31, 2016: Year ended Revenue $ 83,156 Direct costs of network services and equipment (61,582) Operating expense (25,502) Depreciation and interest (949) Income tax benefit 1,805 Loss from discontinued operations $ (3,072) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 4. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, marketable securities, accounts receivable, accounts payable and accrued expenses approximate fair value as of December 31, 2017 and 2018 because of the relatively short duration of these instruments. Marketable securities consist of U.S. treasury securities not otherwise classified as cash equivalents. All marketable securities are considered to be available-for-sale and are recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive loss. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires use of observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows: • Level 1. Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities; • Level 2. Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and • Level 3. Unobservable inputs for which there is little or no market data, which requires the Company to develop its own assumptions. The Company evaluated its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period. The following table summarizes the assets measured at fair value as of December 31, 2017 and 2018: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Money market account (included in cash and cash equivalents $ 28,015 $ — $ — $ 28,015 Total financial assets $ 28,015 $ — $ — $ 28,015 There were no marketable securities as of December 31, 2017. Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 8,194 $ — $ — $ 8,194 $ — $ — $ 8,194 U.S. Reverse repurchase agreements 26,000 — — — 26,000 — 26,000 Total included in cash and cash equivalents 34,194 — — 8,194 26,000 — 34,194 Marketable securities: U.S. treasury securities 17,402 — (2) 17,400 — 17,400 Total marketable securities 17,402 — (2) 17,400 — — 17,400 Total financial assets $ 51,596 $ — $ (2) $ 25,594 $ 26,000 $ — $ 51,594 The Company classifies its marketable securities as current assets as they are available for current operating needs. The following table summarizes the contractual maturities of marketable securities as of December 31, 2018: Amortized cost Aggregate fair value Financial assets: Less than one year $ 17,402 $ 17,400 Total $ 17,402 $ 17,400 The Company monitors the availability of observable market data to assess the appropriate classification of financial instruments within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. There were no transfers between Levels 1, 2 or 3 during the years ended December 31, 2017 and 2018. The money market account is included in cash and cash equivalents in the consolidated balance sheets as of December 31, 2017 and 2018. For fixed income securities that had unrealized losses as of December 31, 2018, the Company determined that no other-than-temporary impairment existed. As of December 31, 2018, all securities in an unrealized loss position have been in an unrealized loss position for less than one year. During the years ended December 31, 2017 and 2018, there were $0 and $18,000, respectively, in maturities of marketable securities. Interest earned on marketable securities in the years ended December 31, 2017 and 2018 was $0 and $77, respectively, and is recorded as other (expense) income, net, in the accompanying consolidated statements of operations and comprehensive income. |
Financial Statement Components
Financial Statement Components | 12 Months Ended |
Dec. 31, 2018 | |
Financial Statement Components [Abstract] | |
Financial Statement Components | 5. Financial Statement Components Accounts receivable, net of allowance for doubtful accounts consist of the following: As of December 31, 2017 2018 Trade accounts receivable $ 44,692 $ 13,620 Unbilled accounts receivable 8,653 11,174 Allowance for doubtful accounts (32,463) (906) Other accounts receivable 343 121 Total accounts receivable, net $ 21,225 $ 24,009 Components of allowance for doubtful accounts are as follows: Year Ended December 31, Allowance for doubtful accounts: 2017 2018 Balance, beginning of period $ 255 $ 189 Charged to bad debt expense 176 454 Deductions (1) (242) (421) Balance, end of period $ 189 $ 222 ________________________ (1) Write off of uncollectible accounts after all collection efforts have been exhausted. Year ended December 31, Allowance for CABS revenue: 2017 2018 Balance, beginning of period $ 22,316 $ 32,274 Charged to bad debt expense — 6 Write-off of previously outstanding and fully reserved billings related to settlement — (24,968) Billings deemed not probable of collection (1) 10,024 357 Revenue recognized from outstanding billings previously deemed uncollectible related to settlement — (6,268) Deductions (2) (66) (717) Balance, end of period $ 32,274 $ 684 ________________________ (1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account. (2) Write off of uncollectible accounts after all collection efforts have been exhausted. Year ended December 31, CABS revenue: 2016 2017 2018 Billed $ 19,838 $ 19,147 $ 13,325 Revenue recognized from current billings (2) 9,344 9,123 12,968 Billings deemed not probable of collection (1) $ 10,494 $ 10,024 $ 357 ________________________ (1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account. (2) Does not include $6,268 in revenue recognized in the year ended December 31, 2018, as a result of a settlement agreement related to previously billed and outstanding and uncollectible invoices . On January 29, 2018, the Company and Verizon entered into a settlement agreement to resolve an ongoing dispute and litigation with Verizon, which is a CABS customer of the Company. The settlement agreement also resolved Verizon’s counter-claims against the Company. Pursuant to the settlement agreement, Verizon made a lump sum payment to the Company on February 8, 2018 of $4,400, which was recognized as revenue. Immediately following receipt of the $4,400 payment, the Company issued to Verizon bill credits with respect to other CABS amounts previously billed and reserved to Verizon of $24,968. The amount credited to Verizon comprised the majority of the allowance for CABS revenue as of December 31, 2017. The Company recognized as revenue $6,268, including the $4,400 payment made on February 8, 2018 and the other current outstanding Verizon CABS receivables which had been previously reserved as uncollectible, but for which collection was no longer in doubt as a result of the settlement. The settlement agreement also specifies certain terms for the Company’s CABS billings to Verizon prospectively. Accrued expenses and other current liabilities consisted of the following: As of December 31, 2017 2018 Accrued expense $ 6,851 $ 8,292 Accrued compensation and benefits 5,237 7,323 Accrued sales, use, and telecom related taxes 3,030 4,742 Deferred rent, current portion 5 298 Other accrued expenses 602 738 Total accrued expenses and other current liabilities $ 15,725 $ 21,393 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 6. Property and Equipment Property and equipment, net consisted of the following: As of December 31, 2017 2018 Furniture and fixtures $ 863 $ 1,741 Computer and office equipment 7,545 7,662 Telecommunications equipment 19,985 30,694 Leasehold improvements 453 2,438 Software development costs 15,517 16,293 Automobile 10 10 Total cost 44,373 58,838 Less—accumulated depreciation (29,427) (33,702) Total property and equipment, net $ 14,946 $ 25,136 The Company capitalizes the costs to design software for internal use related to the development of its platform during the application development stage of the projects. The costs are primarily comprised of salaries and benefits of the projects’ engineers and product development teams. Internally developed software is reported at cost less accumulated amortization. Amortization begins once the project is substantially complete and ready for its intended use. The Company amortizes the asset on a straight-line basis over the useful life, which is estimated to be three Amortization expense related to capitalized software development costs were $2,820, $2,133 and $1,801 for the years ended December 31, 2016, 2017 and 2018, respectively. The Company recognized an impairment of $91, $81 and $158 during the years ended December 31, 2016, 2017 and 2018, respectively, related to capitalized software development costs that provided no future benefit and therefore were impaired. This expense is reflected within cost of revenue in the accompanying consolidated statements of operations. The Company capitalized $2,230, $2,942 and $2,028 of software development costs in the December 31, 2016, 2017 and 2018, respectively. The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Year ended December 31, 2016 2017 2018 Cost of revenue $ 4,574 $ 4,315 $ 4,490 Research and development 29 81 161 Sales and marketing 21 27 51 General and administrative 627 450 568 Total depreciation expense $ 5,251 $ 4,873 $ 5,270 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets Intangible assets consisted of the following as of December 31, 2017: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (3,552) $ 6,844 20 Domain name and related trademarks 2,678 (2,643) 35 3–7 Licenses, amortizable 341 (341) — 2 Non-compete agreements 139 (139) — 2–5 Developed technology 775 (775) — 3 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (7,450) $ 7,643 Intangible assets consisted of the following as of December 31, 2018: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (4,071) $ 6,325 20 Domain name and related trademarks 2,678 (2,678) — 3–7 Licenses, amortizable 341 (341) — 2 Non-compete agreements 139 (139) — 2–5 Developed technology 775 (775) — 3 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (8,004) $ 7,089 Amortization expense for definite lived intangible assets was $891, $839 and $554 for the years ended December 31, 2016, 2017 and 2018, respectively. The weighted average amortization period for all definite lived intangible assets is 19 years. Future estimated amortization expense for definite lived intangible assets is as follows: As of December 31, 2018 2019 $ 520 2020 520 2021 520 2022 520 2023 520 Thereafter 3,725 $ 6,325 Costs associated with the acquisition and transfer of the CLEC perpetual licenses from other entities have been capitalized and have an indefinite life. The Company evaluates these indefinite lived intangible assets on an annual basis to assess if any impairment exists. The Company performed its annual assessment on December 31, 2017 and 2018 and concluded no impairment exists. During the year ended December 31, 2016, the Company re-evaluated its marketing and branding usage of the trade name assets acquired in the Dash acquisition as part of its annual evaluation of its intangible assets, and concluded there was no further benefit from the use of the trade name. The Company impaired the asset and recognized a loss of $695, which is reflected within general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income for the year ended December 31, 2016. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 8. Debt On November 4, 2016, the Company entered into a Credit and Security Agreement with a syndicate of four banks. The agreement includes a $40,000 term loan, and a $25,000 revolving loan, which includes a swing line of up to $1,000 and limits letters of credit commitments to a maximum of $2,500. Substantially all assets of the Company are pledged as security to the Credit and Security Agreement. The term of the Credit and Security Agreement is five On November 14, 2017, the term loan was paid in full with proceeds from the IPO. As of December 31, 2017 and 2018, the Company had $0 outstanding on the term loan and revolving loan and was in compliance with all financial and non-financial covenants for all periods presented. The available borrowing capacity under the Credit and Security Agreement revolving loan was $25,000 as of December 31, 2018. Capital Leases The Company leased various equipment under leases accounted for as capital leases with expiration dates through December 2018. As of December 31, 2017, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,951 and $1,855, respectively. As of December 31, 2018, cost and accumulated depreciation of the assets under capital leases recorded by the Company were $1,951 and $1,884, respectively. There were no remaining payments due on the Company’s capital lease obligations as of December 31, 2018. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 9. Segment and Geographic Information The Company has two reportable segments, CPaaS and Other. Segments are primarily evaluated based on revenue and gross profit. The Company does not allocate operating expenses, interest expense or income tax expense to its segments. Accordingly, the Company does not report such information. Additionally, the Chief Operating Decision Maker does not evaluate the Company’s operating segments using discrete asset information. The segments share the majority of the Company’s assets. Therefore, no segment asset information is reported. Year ended December 31, 2016 2017 2018 CPaaS Revenue $ 117,078 $ 131,572 $ 164,415 Cost of revenue 71,218 75,859 94,296 Gross profit $ 45,860 $ 55,713 $ 70,119 Other Revenue $ 35,057 $ 31,383 $ 39,698 Cost of revenue 14,000 13,403 13,849 Gross profit $ 21,057 $ 17,980 $ 25,849 Consolidated Revenue $ 152,135 $ 162,955 $ 204,113 Cost of revenue 85,218 89,262 108,145 Gross profit $ 66,917 $ 73,693 $ 95,968 All assets were held in the United States as of December 31, 2017 and 2018. The Company generates its revenue primarily in the United States. Revenue by geographical area is detailed in the table below (which is determined based on the customer billing address): Year ended December 31, 2016 2017 2018 United States $ 151,618 $ 162,393 $ 203,567 International 517 562 546 Total $ 152,135 $ 162,955 $ 204,113 |
Stockholder's (Deficit) Equity
Stockholder's (Deficit) Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' (Deficit) Equity | 10. Stockholders’ (Deficit) Equity Prior to the IPO, the Company had three classes of stock: 1) Series A redeemable convertible preferred stock ( “ Series A preferred stock ” ), 2) Old Class A common stock, and 3) Old Class B common stock. On October 19, 2017, the Company’s Board of Directors approved, and on October 23, 2017 the Company effected, a 2.5-to-1 split of its common stock. In connection with the common stock split, each share of outstanding common stock, option to purchase common stock and warrant to purchase common stock was increased to 2.5 shares of common stock and the exercise price of each outstanding option or warrant to purchase common stock was proportionately decreased. The stock split has been reflected retrospectively in these consolidated financial statements. In connection with the stock split, the conversion ratio of each share of outstanding Series A preferred stock was also adjusted such that each share of outstanding Series A preferred stock converted into 2.5 shares of Old Class A common stock after the 2.5-to-1 split. Redeemable Convertible Preferred Stock As of January 1, 2010, the Company had authorized 5,000,000 shares of Series A preferred stock. On February 22, 2011, the Company amended and restated its Certificate of Incorporation such that the Company authorized 1,200,000 shares of preferred stock, all of which have been designated as Series A preferred stock. On February 22, 2011, the Company completed the issuance of 663,907 shares of Series A preferred stock at $30.8358 per preferred share. On March 24, 2011, the Company completed the final closing of 46,093 shares of Series A preferred stock at $30.8358 per preferred share. Pursuant to the Spin-Off, each holder of Series A preferred stock received a share of Republic Class A voting common stock for each share of Series A preferred stock held by such holder equal to the number of shares of Class A common stock into which such share of Series A preferred stock is then convertible. As of December 31, 2016, the Company had 710,000 issued and outstanding shares of Series A preferred stock. On November 9, 2017, each share of Series A preferred stock converted into 2.5 shares of Old Class A common stock at the stockholders ’ option resulting in the issuance of 1,775,000 shares of Old Class A common stock. Conversion Each share of Series A preferred stock was convertible, at the option of the shareholder, into such number of fully paid and non-assessable shares of common stock as is determined by dividing the Series A original issue price by the Series A conversion price in effect at the time of the conversion. The Series A conversion price was initially equal to $30.8358 and is subject to adjustment related to dilutive transactions. As a result of the stock split, the conversion ratio of each share of outstanding preferred stock also was adjusted, such that each share of outstanding preferred stock converts into 2.5 shares of Old Class A common stock at a conversion price of $12.3343. Liquidation Preference In the event of any Liquidation Event or Deemed Liquidation Event, the holders of Series A, preferred stock were entitled to receive, in preference to any distribution of the proceeds to the holders of common stock, an amount per share equal to the greater of (1) an amount equal to the original issue price for Series A preferred stock plus declared but unpaid dividends on such share, plus the product of (a) the number of days elapsed since issuance divided by 365, multiplied by (b) 0.08 multiplied by (c) the Series A original issue price, or (2) such amount as would have been payable had all shares of Series A preferred stock had been converted to common stock immediately prior to such Liquidation or Deemed Liquidation Event. If the proceeds thus distributed among the holders of the Series A preferred stock are insufficient to permit payment to such holders of the full preferential amounts, then the entire proceeds available for distribution shall be distributed ratably. Upon completion of the distribution referred to above, all of the remaining proceeds available for distribution shall be distributed to the holders of the Company’s common stock pro rata based on the number of common stock held by each. Redemption Shares of Series A preferred stock were redeemable by the Company out of funds lawfully available at a price equal to the Series A original issue price per share, plus all declared but unpaid dividends thereon, in three annual installments commencing not more than 60 days after receipt by the Company at any time on or after December 31, 2020, from the holders of a majority of the then-outstanding shares of Series A preferred stock. At each redemption date, shares of Series A Preferred stock were redeemable, on a pro-rata basis in accordance with the number of shares of Series A preferred stock owned by each holder, that number of outstanding shares of Series A preferred stock determined by dividing the total number of shares of Series A preferred stock outstanding by the number of remaining redemption dates (including the redemption date to which such calculation applies). Voting Rights The holders of Series A preferred stock were entitled to cast the number of votes equal to the number of whole shares of common stock into which the shares of Series A preferred stock are convertible as of the record date for determining stockholders entitled to vote on such matter. Holders of Series A preferred stock shall vote together with the holders of Old Class A common stock as a single class. The holders of record of the shares of Series A preferred stock, exclusively and as a separate class, were entitled to elect one director of the Company. The Company could not, without the approval of the holders of record of a majority of the shares of Series A preferred stock, as a separate class, undertake certain actions as specified in the Certificate of Incorporation, as amended and restated as of February 22, 2011 and as subsequently amended. Dividends The amount of any dividend on an outstanding share of Series A preferred stock is determinable based upon the number of shares of common stock into which such Series A preferred stock is then convertible based upon the original issuance price of a share of Series A preferred stock of $30.8358 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A preferred stock. During the years ended December 31, 2016, 2017 and 2018, no dividends were declared. Preferred Stock On November 9, 2017, the Company filed its second amended and restated certificate of incorporation and authorized 10,000,000 shares of undesignated preferred stock, par value $0.001, of which no shares were issued and outstanding as of December 31, 2017 and 2018. Common Stock As of December 31, 2016, the Company had two classes of common stock: (1) Old Class A common stock and (2) Old Class B common stock. The Old Class A common stock had one vote per share and the Old Class B common stock had no voting rights. As of December 31, 2016, there were 11,779,975 shares of Old Class A common stock issued and outstanding at $0.001 par value per share. As of December 31, 2016, there were 18,590 shares of Old Class B common stock issued and outstanding at $0.001 par value per share. On November 9, 2017, the Company filed its second amended and restated certificate of incorporation. Upon the effectiveness of the Company’s second amended and restated certificate of incorporation and the effectiveness of the Company’s second amended and restated bylaws, i) each share of Old Class A common stock was reclassified as one share of Class B common stock with ten votes per share, ii) each share of Old Class B common stock was reclassified as one share of Class A common stock with one vote per share. Consequently, the Series A preferred stock, that had previously converted into 2.5 shares of the Old Class A common stock, at the option of the holder, was converted into 1,775,000 shares of Class B common stock. Subsequent to the effectiveness of the Company’s second amended and restated certificate of incorporation, the Company’s common stock consists of 120,000,000 authorized shares, par value $0.001 per share, of which the authorized Class A common stock consists of 100,000,000 shares and the authorized Class B common stock consists of 20,000,000 shares as of December 31, 2017 and 2018. As of December 31, 2017 and 2018, there were 4,197,831 and 12,912,747 shares, respectively, of Class A common stock issued and outstanding at $0.001 par value per share. As of December 31, 2017 and 2018, there were 13,440,725 and 6,510,732 shares, respectively, of Class B common stock issued and outstanding at $0.001 par value per share. Shares of Class B common stock are convertible into shares of Class A common stock upon the stockholder’s voluntary written notice to the Company’s transfer agent or a transfer by the stockholder, subject to limited exceptions for transfers for estate planning purposes. Voting Rights The holders of Class A common stock and Class B common stock have identical rights, except that holders of Class A voting common stock are entitled to one vote per share of Class A common stock and holder of Class B common stock are entitled to ten votes per share of Class B common stock. Dividends Any dividends or distributions paid or payable to the holders of shares of Class A common stock and Class B common stock shall be paid pro rata, on an equal priority. During the year ended December 31, 2018, no dividends were declared. Dividend payments are subject to a restriction by the Company’s Credit and Security Agreement prohibiting the Company to pay any dividends or any other distribution or payment on account of or in redemption, retirement or purchase of any capital stock through the term of the agreement. Option to Purchase Additional Shares On November 28, 2017, the Underwriters exercised their option to purchase 162,991 of Class B common stock held by certain selling shareholders. Immediately upon transfer, the shares converted into Class A common stock in accordance with the Company’s second amendment and restated certificate of incorporation. Stock Purchase Warrants In connection with four notes payable issued December 20, 2010, the Company granted stock purchase warrants to the previous debt holders. The warrants were exercisable for 30,470 shares of the Company’s Old Class A common stock at an exercise price of $5.80 per share. 15,844 of these warrants were exercised in 2017, resulting in none outstanding at December 31, 2017 and 2018. The Company granted other stock purchase warrants in 2011 that were exercisable for 43,847 shares of the Company’s Old Class A common stock at an exercise price of $0.001 per share. Warrants outstanding to purchase shares of the Company’s Old Class A common stock were 39,000 and 0, respectively, at December 31, 2017 and 2018. Additional warrants to purchase 9,846 shares of the Company’s Old Class A common stock were granted in 2011 at an exercise price of $5.80 per share. These warrants outstanding at December 31, 2017 and 2018 were 9,846 and 0, respectively. Warrants to purchase 4,531 shares of the Company’s Old Class A common stock were granted in 2017 at an exercise price of $6.57 per share. These warrants outstanding at December 31, 2017 and 2018 were 2,504 and 0, respectively. Pursuant to the Spin-Off, each holder of a warrant to purchase common stock was issued a warrant to purchase shares of Republic Class A voting common stock with equivalent economic terms. A total of 51,350 and 0 shares of common stock were reserved for the issuance of stock purchase warrants at December 31, 2017 and 2018, respectively. On November 9, 2017, the Company filed its second amended and restated certificate of incorporation. Upon the effectiveness of the Company’s second amended and restated certificate of incorporation and the effectiveness of the Company’s second amended and restated bylaws, warrants exercisable for shares of Old Class A common stock became exercisable into shares of Class B common stock. Spin-Off Pursuant to the Spin-Off, (i) each holder of Old Class A common stock received one share of Republic Class A common stock for each share of Old Class A common stock held by such holder, (ii) each holder of Old Class B common stock received one share of Republic Class B non-voting common stock for each share of Old Class B non-voting common stock held by such holder and (iii) each holder of Series A preferred stock received a number of shares of Republic Class A voting common stock for each share of Series A preferred stock held by such holder equal to the number of shares of Old Class A common stock into which such share of Series A preferred stock is then convertible. Reserved Shares The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of December 31, 2017 2018 Stock options issued and outstanding 3,659,791 1,937,370 Nonvested restricted stock units issued and outstanding — 324,252 Stock purchase warrants issued and outstanding 51,350 — Stock-based awards available for grant under the 2017 Plan 1,050,000 896,760 4,761,141 3,158,382 |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 11. Stock Based Compensation 2001 and 2010 Stock Option Plans During 2001, the Company adopted the Bandwidth Inc. Stock Option Plan (the “2001 Plan”). As of July 26, 2010, the Company adopted the 2010 Equity Compensation Plan (the “2010 Plan”). On August 24, 2017, the 2010 Plan was amended to provide for a total of 3,466,275 shares of common stock reserved for issuance under the 2010 Plan. Eligible plan participants include employees, directors and consultants. The 2001 Plan and the 2010 Plan each permit the granting of incentive stock options and non-qualified stock options. Following the effectiveness of the 2010 Plan, the Company did not make any further grants under the 2001 Plan. On November 9, 2017, the 2010 Plan was terminated in connection with the Company’s IPO. Accordingly, no shares are available for future issuance under the 2010 Plan. However, the 2010 Plan continues to govern the terms and conditions of the outstanding awards granted thereunder. On November 9, 2017, the Company filed its second amended and restated certificate of incorporation. Upon the effectiveness of the Company’s second amended and restated certificate of incorporation and the effectiveness of the Company’s second amended and restated bylaws, options exercisable into shares of Old Class A common stock and Old Class B common stock became exercisable into shares of Class B common stock and Class A common stock, respectively. 2017 Incentive Award Plan The Company’s 2017 Incentive Award Plan (the “2017 Plan”) became effective on November 9, 2017. The 2017 Plan provides for the grant of stock options, including incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, and other stock or cash based awards to employees, consultants and directors of the Company. A total of 1,050,000 shares of the Company’s Class A common stock were originally reserved for issuance under the 2017 Plan. These available shares automatically increase each January 1, beginning on January 1, 2018, by 5% of the number of shares of the Company’s Class A common stock outstanding on the final day of the immediately preceding calendar year. On January 1, 2018, the shares available for grant under the 2017 Plan were automatically increased by 200,000 shares. The terms of the stock option grants are determined by the Company’s Board of Directors. The Company’s stock options vest based on terms of the stock option agreements, which is generally over four years. The stock options have a contractual life of ten years. Restricted stock units (“RSU”) granted under the 2017 Plan are subject to a time-based vesting condition. The compensation expense related to these awards is based on the grant date fair value of the RSUs and is recognized on a ratable basis over the applicable service period. The Company granted restricted stock units to its non-employee Board of Directors, some of which vested immediately while others vest 25% as of each calendar quarter immediately following the grant date. Other RSUs awarded to executives and employees generally are earned over a service period of four years. Stock options The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below: Year ended December 31, 2016 2017 2018 Expected dividend yield —% —% —% Expected stock price volatility 44% 44%-49% 47% Average risk-free interest rate 1.3%-2.0% 1.9%-2.3% 2.5% Expected life 6.2 years 6.2 years 6.2 years Fair value of common stock $9.57-$9.60 $9.60-$20.83 $22.81 The following summarizes the stock option activity for the year ended December 31, 2018: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2017 3,659,791 $ 6.88 4.38 $ 59,436 Granted 17,988 22.81 Exercised (1,724,689) 6.40 56,313 Forfeited or cancelled (15,720) 12.10 Outstanding as of December 31, 2018 1,937,370 $ 7.41 4.00 $ 64,596 Options vested and exercisable at December 31, 2018 1,684,575 $ 6.66 3.44 $ 57,421 Options vested and expected to vest as of December 31, 2018 1,931,004 $ 7.39 3.99 $ 64,422 Aggregate intrinsic value is computed based on the difference between the option exercise price and the estimated fair value of the Company’s common stock as of December 31, 2018. Prior to the IPO, the fair value of the Company’s common stock was estimated by the Company’s board of directors. After the IPO, the fair value of the Company’s common stock is the Company’s Class A common stock price as reported on the NASDAQ Global Select Market. The weighted average grant-date fair value of stock options granted was $4.06, $7.72 and $11.10 for the years ended December 31, 2016, 2017 and 2018, respectively. The total estimated grant date fair value of options vested was $2,082, $1,299 and $979 for the years ended December 31, 2016, 2017 and 2018, respectively. As of December 31, 2018, total unrecognized compensation cost related to all non-vested stock options was $1,197, which will be amortized over a weighted-average period of 2.04 years. Restricted Stock Units The following summarizes the restricted stock unit activity for the periods presented: Number of awards outstanding Weighted-average grant date fair value (per share) Nonvested RSUs as of December 31, 2017 — $ — Granted 342,423 26.89 Vested (11,000) 23.73 Forfeited or cancelled (7,171) 28.74 Nonvested RSUs as of December 31, 2018 324,252 $ 26.95 As of December 31, 2018, total unrecognized compensation cost related to non-vested RSUs was $6,769, which will be amortized over a weighted-average period of 3.22 years. Stock-Based Compensation Expense The Company recognized total stock-based compensation expense in continuing operations as follows: Year ended December 31, 2016 2017 2018 Cost of revenue $ 61 $ 80 $ 114 Research and development 138 155 555 Sales and marketing 182 172 511 General and administrative (1) (2) 989 1,396 2,159 Total $ 1,370 $ 1,803 $ 3,339 ________________________ (1) On September 1, 2017, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 194,234 outstanding options to purchase common stock, which accelerated the vesting period and extended the exercise period, resulting in the recognition of $394 of additional stock compensation expense for the year ended December 31, 2017. (2) On December 21, 2018, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 17,725 non-vested restricted stock units, which accelerated the vesting period, resulting in the recognition of $535 of additional stock compensation expense for the year ended December 31, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. Commitments and Contingencies Operating Leases The Company leases approximately 181,000 square feet of office space under operating lease agreements that expire at various dates beginning in 2021 and extend through 2025 in several locations within the United States including its headquarters, which is located in Raleigh, NC. On January 12, 2018, the Company entered into an 84-month operating lease agreement to provide 40,035 square feet of additional office space, which was occupied in September 2018. On March 27, 2018, the Company entered into a 60-month operating lease agreement to provide 5,930 square feet of additional office space, which commenced in June 2018. On July 20, 2018, the Company entered into a 12-month operating lease agreement to provide 2,605 square feet of additional office space, which commenced in July 2018. The leases contain escalation clauses and various landlord concessions including tenant improvement allowances. The Company recognizes the total minimum lease payments on a straight-line basis over the term of the lease. Future minimum lease payments required under operating leases are as follows: As of December 31, 2018 2019 $ 5,044 2020 5,180 2021 5,254 2022 3,438 2023 1,399 Thereafter 2,343 $ 22,658 The Company incurred rent expense of $2,003, $3,327 and $4,331 for the years ended December 31, 2016, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations and comprehensive income. In conjunction with the Spin-Off, the Company signed a Facilities Service Agreement with Republic in which the Company agreed to sub-lease 40,657 square feet of office space to Republic. The sub-lease is non -cancellable and extends to May 2022. The Company recorded a reduction of rent expense of $47, $949 and $1,005 for the years ended December 31, 2016, 2017 and 2018 respectively, which is included in general and administrative expenses in the consolidated statements of operations and comprehensive income. Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2018 2019 $ 1,042 2020 1,065 2021 1,089 2022 594 $ 3,790 Contractual Obligations On October 25, 2015, the Company entered into an agreement with a telecommunications service provider. The service agreement requires the Company to pay a monthly recurring charge beginning on January 1, 2016 associated with the services received. The service agreement is non-cancellable and contains annual minimum commitments of $1,200, to be fulfilled over five years or for as long as the Company continues to receive services from this vendor. In addition, as of December 31, 2018 the Company has $4,782 in other non-cancellable purchase obligations, consisting of primarily network equipment maintenance and software license contracts, of which $4,070 will be fulfilled within a year. Legal Matters The Company is involved as a defendant in various lawsuits alleging that the Company failed to bill, collect and remit certain taxes and surcharges associated with the provision of 911 services pursuant to applicable laws in various jurisdictions. In August 2016, the Company received a Civil Investigative Demand from the Consumer Protection Division of the North Carolina Department of Justice, though no formal complaint has been filed in connection with that investigation. The North Carolina Department of Justice is investigating the billing, collection and remission of certain taxes and surcharges associated with 911 service pursuant to applicable laws of the State of North Carolina. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 13. Employee Benefit Plan The Company sponsors a defined contribution 401(k) plan which allows eligible employees to defer a portion of their compensation. The Company, at its discretion, may make matching contributions. The Company made matching contributions of $716, $806 and $1,117 for the years ended December 31, 2016, 2017 and 2018, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes Benefit (provision) for income taxes from continuing operations consists of the following: Year ended December 31, 2016 2017 2018 Current: Federal $ 66 $ (448) $ 162 State (58) (302) (125) Total 8 (750) 37 Deferred: Federal 9,999 (5,983) 8,945 State 1,087 (185) 1,888 Total 11,086 (6,168) 10,833 Total benefit (provision) for income taxes $ 11,094 $ (6,918) $ 10,870 The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2016, 2017 and 2018: Year ended December 31, 2016 2017 2018 Federal Tax Rate 34.0 % 34.0 % 21.0 % State Tax Rate 4.2 4.7 6.3 Non-deductible expenses 5.0 1.2 1.7 Research credit (2.3) (1.5) (13.6) Stock-based compensation (24.5) 0.1 (168.0) Change in valuation allowance (98.6) — — Deferred tax rate change 0.8 16.1 (0.7) Other 4.0 (0.9) (0.8) Total (77.4) % 53.7 % (154.1) % The following table presents the significant components of the Company’s net deferred tax assets: As of December 31, 2017 2018 Deferred tax assets: Allowance for doubtful accounts $ 48 $ 57 Accrued liabilities 1,687 2,755 Deferred revenue 395 734 Intangibles 166 85 Stock-based compensation - deferred tax asset 4,668 3,486 Tax credits 2,071 2,690 Net operating losses 26 11,359 Other deferred tax assets 37 61 Total deferred tax assets 9,098 21,227 Less: valuation allowance — — Net deferred tax assets 9,098 21,227 Deferred tax liability: Property and equipment 1,797 2,993 Goodwill 582 729 Other liability 193 146 Total deferred tax liabilities 2,572 3,868 Net deferred tax asset $ 6,526 $ 17,359 The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered the historic performance of Bandwidth, the nature of the Company’s deferred tax assets and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. Based on an analysis of these factors, the Company determined that in 2018 no valuation allowance against deferred tax assets was required. As of December 31, 2018, the Company had approximately $45,148 in federal net operating loss carryforwards and $3,691 in federal tax credits. All federal net operating loss carryforwards were generated after the enactment of the Tax Cuts and Jobs Act (the “Act”) and as such do not expire, but can only be utilized to offset up to 80% of taxable income in any given year. The federal tax credits start to expire at various dates beginning in 2032. As of December 31, 2018, the Company had approximately $36,499 in state net operating loss carryforwards. If not utilized, some state net operating loss carryforwards will expire at various dates beginning in 2023. In accordance with SEC Staff Accounting Bulletin (“SAB”) 118, the Company completed all accounting related to the Act in the fourth quarter of 2018. There was no change made to the provisional re-measurement of the deferred tax balance, which was recorded in the fourth quarter of 2017. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year ended December 31, 2017 2018 Unrecognized tax benefits—January 1, $ 671 $ 731 Gross increases—tax positions in prior period — 56 Gross increases—tax positions in current period 64 287 Lapse of statute of limitations (4) (28) Unrecognized tax benefits—December 31, $ 731 $ 1,046 If the $1,046 of unrecognized tax benefit is recognized, it would impact the effective tax rate. The Company has not incurred any material tax interest or penalties with respect to income taxes in the years ended December 31, 2017 and 2018. The Company expects no material changes in the twelve months following December 31, 2018 in its uncertain tax positions. The Company files U.S. federal income tax returns as well as income tax returns in many U.S. states. The tax years 2008-2010 and 2012-2016 remain open to examination by the major jurisdictions in which the Company is subject to tax due to the carryforward of net operating losses. |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties | 15. Related Parties In connection with the Spin-Off on November 30, 2016, the Company and Republic entered into certain agreements in order to govern the ongoing relationships between the two companies after the Spin-Off and to provide for an orderly transition. The agreements include a Transition Services Agreement, Facilities Sharing Agreement, Tax Sharing Agreement, and Master Services Agreement. The equity holders of Bandwidth pre-IPO are comprised of substantially the same individuals and entities that are the equity owners of Republic. The Company has determined the equity owners of Republic are related parties of Bandwidth. The Company has certain involvement with Republic via ongoing services arrangements, with these ongoing services arrangements creating a variable interest in Republic. The Company assessed the relationship with Republic under guidance for variable interest entities. Because investors in Republic have disproportionate voting rights, the Company concluded that Republic is a VIE, but Bandwidth is not a primary beneficiary. The Company’s maximum exposure to loss relating to this variable interest entity is limited to amounts due under the service agreements between the Company and Republic. The Transition Services Agreement specifies certain services to be provided by the Company for a period of up to two years from the Spin-Off. These services include insurance administration, billing and collections, and other technical support as well as legal services related to intellectual property. The Company is compensated by Republic for these services based on costs incurred by the Company. The Company received net compensation under the Transition Services Agreement of $134, $575 and $80 for the years ended December 31, 2016, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations and comprehensive income. In addition, there was approximately $15 and $0 due from Republic as of December 31, 2017 and 2018, respectively, which was recorded within accounts receivable in the accompanying consolidated balance sheets. The Facilities Sharing Agreement specifies that the Company will sublet office space to Republic for at least 63 months. The Company received rental payments under the Facilities Sharing Agreement of $47, $949 and $1,005 for the years ended December 31, 2016, 2017 and 2018, respectively, which is included in general and administrative expenses in the consolidated statements of operations and comprehensive income. No amounts were due to the Company under the Facilities Sharing Agreement as of December 31, 2017 and 2018. The Tax Sharing Agreement governs rights and obligations after the Spin-Off regarding income taxes and other taxes, including tax liabilities and benefits, attributes, returns and contests. There are no amounts outstanding or payable under this agreement as of December 31, 2017 and 2018. The Master Services Agreement specifies certain wholesale telecommunications services to be provided by the Company. The agreement is cancellable at any time by either party. The Company provided telecommunication services to Republic of $173, $2,451 and $3,884 for the years ended December 31, 2016, 2017 and 2018, respectively. The Company recognized such amounts as revenue in the accompanying consolidated statements of operations and comprehensive income. As of December 31, 2017 and 2018, the Company had a receivable of $311 and $327, respectively, under the Master Services Agreement. Subsequent to the expiration of the 180-day blackout window on May 9, 2018, Republic employees that held Bandwidth stock options began exercising their options. Upon exercise, Bandwidth withholds the employee tax amounts due from the proceeds. For the year ended December 31, 2018 Bandwidth had collected on behalf of, and remitted withholding tax to, Republic of $9,213, and had a related payable of $0 as of December 31, 2018. |
Basic and Diluted Income per Co
Basic and Diluted Income per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Income per Common Share | 16. Basic and Diluted Income per Common Share During the year ended December 31, 2017, the Company used the two-class method to compute net income per common share, because it had issued securities, other than common stock, that contractually entitled the holders to participate in dividends and earnings. These participating securities included the Company’s redeemable convertible preferred stock which had non-forfeitable rights to participate in any dividends declared on the Company’s common stock. The two-class method requires earnings for the period to be allocated between common stock and participating securities based upon their respective rights to receive distributed and undistributed earnings. Under the two-class method, for periods with net income, basic net income per common share is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Net income attributable to common stockholders is computed by subtracting from net income the portion of current period earnings that the participating securities would have been entitled to receive pursuant to their dividend rights had all of the period’s earnings been distributed. No such adjustment to earnings is made during periods with a net loss, as the holders of the participating securities have no obligation to fund losses. Diluted net income per common share is computed under the two-class method by using the weighted average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of stock options and warrants. The Company analyzed the potential dilutive effect of any outstanding dilutive securities under the “if-converted” method and treasury-stock method when calculating diluted earnings per share, in which it is assumed that the outstanding participating securities convert into common stock at the beginning of the period or date of issuance, if later. The Company reports the more dilutive of the approaches (two-class or “if-converted”) as its diluted net income per share during the period. As of January 1, 2018, the Company no longer had outstanding securities other than common stock, which required holders’ participation in dividends and earnings; therefore, the Company no longer was required to calculate EPS under the two-class method. Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is computed by giving effect to all potential shares of common stock, including stock options, stock related to unvested restricted stock awards, and outstanding warrants to the extent dilutive. The components of basic and diluted earnings per share, or EPS, are as follows: Year ended December 31, 2016 2017 2018 Income from Continuing Operations Income from continuing operations $ 25,430 $ 5,971 $ 17,923 Less: net income allocated to participating securities 3,355 644 — Income from continuing operations attributable to common stockholders $ 22,075 $ 5,327 $ 17,923 Income from continuing operations per share: Basic $ 1.89 $ 0.42 $ 0.96 Diluted $ 1.72 $ 0.37 $ 0.85 Loss from Discontinued Operations Loss from discontinued operations, net of income taxes $ (3,072) $ — $ — Less: loss allocated to participating securities (405) — — Loss from discontinued operations attributable to common stockholders $ (2,667) $ — $ — Loss from discontinued operations per share attributable to stockholders: Basic $ (0.23) $ — $ — Diluted $ (0.21) $ — $ — Net income Net income $ 22,358 $ 5,971 $ 17,923 Less: income allocated to participating securities 2,950 644 — Net income attributable to common stockholders $ 19,408 $ 5,327 $ 17,923 Net income per share: Basic $ 1.66 $ 0.42 $ 0.96 Diluted $ 1.51 $ 0.37 $ 0.85 Weighted Average Number of Common Shares Outstanding Basic 11,678,568 12,590,221 18,573,067 Dilutive effect of stock options, restricted stock units, and warrants 1,192,064 1,952,949 2,567,315 Diluted 12,870,632 14,543,170 21,140,382 The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented: Year ended December 31, 2016 2017 2018 Anti-dilutive Disclosure Series A redeemable convertible preferred stock outstanding 1,775,000 1,522,123 — Stock options issued and outstanding 237,185 50,604 — |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events On January 1, 2019, the Company entered into an amendment to an office building lease relating to 117,719 square feet of office space, which includes the Company’s headquarters. This amendment adds an additional 30,114 square feet and extends the lease term until January 31, 2024. In addition, this amendment gives the Company the option to extend the lease for an additional five certain increases in the annual base rent. The amendment to the office building lease is expected to commence in April 2019. Future expected minimum payments under the amended lease are as follows: Amount 2019 $ 2,402 2020 3,543 2021 3,627 2022 3,845 2023 4,120 Thereafter 345 $ 17,882 On January 1, 2019, the Company entered into an amendment to an office building lease relating to 40,657 square feet of office space in conjunction with the Spin-Off. The amendment gives the Company the options to extend the lease for an additional period of approximately 18 months and a subsequent additional five |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Reclassification | Reclassification The Company reclassified certain prior year amounts to conform to the current year presentation. These reclassifications had no impact on the previously reported total assets, liabilities, stockholder’s deficit or net income. |
Principles of Consolidation | The consolidated financial statements include the accounts of Bandwidth Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the amounts reported in these financial statements and accompanying notes. Although the Company believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making these estimates, actual results reported in future periods could differ from those estimates. These estimates in the consolidated financial statements include, but are not limited to, allowance for doubtful accounts, recoverability of long lived and intangible assets, customer relationship period, valuation allowances on tax assets, certain accrued expenses, and contingencies. |
Revenue Recognition and Cost of Revenue | Revenue Recognition Revenue consists primarily of the sale of communications services offered through API software solutions to large enterprise, as well as small and medium-sized business, customers and are generally derived from usage and monthly service fees for both the CPaaS and Other segments. Usage revenue includes voice communication (primarily driven by inbound minutes, outbound minutes, toll-free minutes) and messaging communication (driven by the number of messages) that traverse the platform and network. Revenue for these services is recognized in the period the usage occurs. Monthly service fees include the provision and management of phone numbers and emergency services access, which is recognized as the service is provided. In addition, the Company earns Carrier Access Billings (“CABS”) revenue by allowing interconnected telecommunication carriers to pass traffic through its network and, as such the Company is the principal in delivering communication services to such carriers. Revenue for these services is recognized in the period the usage occurs. When required as part of providing service, revenues and associated expenses related to nonrefundable, upfront service activation and setup fees are deferred and recognized over the longer of the associated service contract period or estimated customer life. Revenue recognition commences when all of the following criteria are met (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the fee is fixed or determinable; and (iv) collection is probable. Customers generally enter into arrangements that are typically two to three years in length. Cost of Revenue CPaaS cost of revenue consists primarily of fees paid to other network service providers from whom the Company buys services such as minutes of use, phone numbers, messages, porting of customer numbers, and network circuits. Cost of revenue also contains costs related to the support of the network, web services and cloud infrastructure, capacity planning and management, rent for network facilities, software licenses, hardware and software maintenance fees, and network engineering services. Personnel costs (including non-cash stock-based compensation expenses) associated with personnel who are responsible for the delivery of services, operation and maintenance of the communications network, customer support, as well as, third party support agreements, and depreciation are also recorded as cost of revenue. Other cost of revenue consists of amortization of capital software development costs related to platform applications supporting non-CPaaS services including circuit costs paid to third party providers, internet connectivity expenses, minutes of use, contractors, regulatory fees and surcharges, depreciation, and software and hardware maintenance fees. |
Research and Development Expense | Research and Development R&D expenses consist primarily of personnel costs (including non-cash stock-based compensation expenses), outsourced software development and engineering services and cloud infrastructure fees for staging and development outsourced engineering services. |
Sales and Marketing, General and Administrative Expenses | Sales and Marketing Sales and marketing expenses consist primarily of personnel costs, including commissions for sales employees and non-cash stock-based compensation expenses. Sales and marketing expenses also include expenditures related to advertising, marketing, brand awareness activities, sales support and professional services fees. General and Administrative General and administrative expenses consist primarily of personnel costs for support personnel and executives in accounting, finance, legal, information services, human resources and administrative functions. General and administrative expenses also include costs related to product management and reporting, data services, customer billing and collection functions, and other professional services fees, credit card processing fees, rent associated with the Company’s headquarters in Raleigh, North Carolina, depreciation and amortization. |
Cash and Cash Equivalents | The Company classifies all highly liquid investments with stated maturities of three months or less from date of purchase as cash equivalents and all highly liquid investments with stated maturities of greater than three months from the date of purchase as current marketable securities. The Company has a policy of making investments only with commercial institutions that have at least an investment grade credit rating. The Company invests its cash primarily in government securities and obligations, corporate debt securities, money market funds and reverse repurchase agreements (“RRAs”). RRAs are collateralized by deposits in the form of Government Securities and Obligations for an amount not less than 102% of their value. The Company does not record an asset or liability as the Company is not permitted to sell or repledge the associated collateral. The Company has a policy that the collateral has at least an “A” (or equivalent) credit rating. The Company utilizes a third party custodian to manage the exchange of funds and ensure that collateral received is maintained at 102% of the value of the RRAs on a daily basis. RRAs with stated maturities of greater than three months from the date of purchase are classified as marketable securities. |
Restricted Cash | Restricted cash is for Automated Clearing House (“ACH”) availability, customer deposits and for credit card security. The Company has classified this asset as a long-term asset in order to match the expected period of restriction and is included in Other long-term assets in the consolidated balance sheets. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness and current economic trends. If the financial condition of customers were to deteriorate, resulting in their inability to make required payments, additional provisions for doubtful accounts would be required and would increase bad debt expense. Management has evaluated the collectability of trade accounts receivable and determined that allowances of approximately $32,463 and $906 for uncollectible accounts and customer balances that are disputed were required as of December 31, 2017 and 2018, respectively. The allowance for doubtful accounts as of December 31, 2017 primarily relates to billings for CABS services where collectability was deemed not probable due to prior period customer disputes. Refer to Note 5, “Financial Statement Components,” for a rollforward of the components of the allowance for doubtful accounts as of December 31, 2017 and 2018, and for discussion of the settlement agreement that was entered into in 2018 that resolved the ongoing dispute and litigation with MCI Communications Services, Inc. d/b/a Verizon Business and Verizon Select Services, Inc. (collectively, “Verizon”), which is a CABS customer of the Company. The Company includes unbilled receivables in its accounts receivable balance. Generally, these receivables represent services provided to customers, which will be billed in the next billing cycle. All amounts are considered collectible and billable. As of December 31, 2017 and 2018, unbilled receivables were $8,653 and $11,174, respectively. |
Concentration of Credit Risk | Financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade accounts receivable. Cash deposits may be in excess of insured limits. The Company believes that the financial institutions that hold its cash deposits are financially sound and, accordingly, minimal credit risk exists with respect to these balances.With regard to customers, credit evaluation and account monitoring procedures are used to minimize the risk of loss. The Company believes that no additional credit risk beyond amounts provided for by the allowance for doubtful accounts are inherent in accounts receivable. |
Property and Equipment, net | roperty and Equipment, net Prop erty and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computer hardware and software 2 to 5 years Internal-use software development costs 3 years Furniture and fixtures 2 to 7 years Leasehold improvements Shorter of the estimated lease term or useful life Maintenance and repairs are charged to expense as incurred. |
Deferred Costs | Deferred Costs The Company defers certain direct and incremental upfront costs related to the generation of a revenue stream or obtaining a new customer agreement. These costs include installment fees, activation and other telecommunication fees. The Company capitalizes these costs and amortizes them over the longer of the term of the customer contracts or the estimated customer life, which is approximately three years. |
Software Development Costs | Software Development Costs The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed and (ii) it is probable that the software will be completed and used for its intended function. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over three years. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Debt Issuance Costs | Debt Issuance Costs The Company incurred debt issuance costs associated with obtaining and entering into a five-year Credit and Security Agreement in November 2016, which includes a revolving credit facility and a term loan. These costs include non-refundable structuring fees, commitment fees, up-front fees and syndication expenses, which have been |
Goodwill | Goodwill The Company reviews goodwill and indefinite-lived intangible assets at least annually, as of December 31, for possible impairment. Goodwill and indefinite-lived intangible assets are reviewed for possible impairment at an interim date if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit or indefinite-lived intangible asset below its carrying value. The Company tests goodwill at the reporting unit level and has determined that it has two-reporting units, CPaaS and Other. All Goodwill is allocated to the CPaaS reporting unit. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to its net book value, including goodwill. If the carrying value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its carrying value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. The Company makes assumptions regarding estimated future cash flows, discount rates, long-term growth rates and market values to determine each reporting unit’s and indefinite-lived intangible asset’s estimated fair value. If these estimates or related assumptions change in the future, the Company may be required to record an impairment charge. As of December 31, 2017 and 2018, the Company has recorded goodwill of $6,867. No goodwill impairment charges were recorded for the years ended December 31, 2016, 2017 and 2018. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and definite lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. |
Advertising Costs | Advertising CostsThe Company expenses advertising costs as incurred. |
Commissions | Commissions Commissions consist of variable compensation earned by sales personnel and third-party resellers. Sales commissions associated with the acquisition of a new customer contract are paid over time, based on monthly revenues, and are recognized as sales and marketing expense in the period incurred. |
Share-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation expense related to all stock-based awards based on the fair value of the award on the grant date. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period, which is generally four years. The fair value of the restricted stock units is determined using the fair value of the Company’s Class A common stock on the date of grant. The Company uses the Black-Scholes option pricing model, net of estimated forfeitures, to measure the fair value of its stock options. The Black-Scholes option pricing model requires the use of objective and subjective assumptions, which determine the fair-value of stock-based awards. These assumptions include: • Fa ir value of our common stock. Prior to the Company’s IPO, the fair value of the shares of the Company’s common stock underlying stock options has historically been established by the board of directors. Numerous objective and subjective factors that were considered included, but were not limited to, the following: i) contemporaneous independent, third-party valuations of the Company’s common stock; ii) the rights, preferences and privileges of the Company’s redeemable convertible preferred stock relative to those of the Company’s common stock; iii) the Company’s results of operations, financial position and capital resources; iv) current business conditions and projections; v) the lack of marketability of the Company’s common stock; vi) the hiring of key personnel and the experience of the Company’s management; vi) the introduction of new products; vii) the risk inherent in the development and expansion of the Company’s products; viii) the fact that the option grants involve illiquid securities in a private company; ix) the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company, given the prevailing market conditions; x) industry trends and competitive environment; and xi) overall economic indicators, including gross domestic product, employment, inflation and interest rates. After the IPO, the Company uses the market closing price of its Class A common stock as reported on the NASDAQ Global Select Market for the fair value. • Expected term. The expected term was estimated using the simplified method allowed under SEC guidance as the Company does not have sufficient historical data to use any other method to estimate the expected term. • Expected volatility. The expected volatility is derived from an average of the historical volatilities of the common stock of several entities with characteristics similar to those of the Company, such as the size, and operational and economic similarities to its principle business operations. The Company uses this method because it has limited information on the volatility of its common stock. • Risk-free interest rate. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group as of the grant date. • Expected dividends. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on its common stock. The Company has elected to estimate expected forfeitures, and, as such, the Company must also determine a forfeiture rate to calculate the stock-based compensation for awards. Through December 31, 2018, the Company recognized compensation for only the portion of options expected to vest using an estimated forfeiture rate that was |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that it will not realize some or all the deferred tax asset. Quarterly, the Company reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and the implementation of prudent and feasible tax planning strategies. The evaluation of the recoverability of deferred tax assets requires judgment in assessing future profitability. Should there be a change in the ability to recover deferred tax assets, the Company’s income tax provision would increase or decrease in the period in which the assessment is changed. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is more likely than not that the position will be sustained upon examination. The tax benefit recognized is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company recognizes potential accrued interest and penalties associated with unrecognized tax positions in income tax expense. |
Operating Segments | Operating Segments Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to make operating decisions, allocate resources and in assessing performance. The Company has two operating segments, CPaaS and Other, which are deemed to be reportable segments. The Company’s CODM is its Chief Executive Officer. The CODM evaluates the performance of the Company’s operating segments primarily based on revenue and gross profit. The Company does not analyze discrete segment balance sheet information related to long-term assets, all of which are located in the United States. All other financial information is evaluated on a consolidated basis. |
Earnings Per Share | Earnings per Share Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, options and warrants to purchase common stock and redeemable convertible preferred stock are considered to be potential common stock. Historically, the Company issued securities other than common stock that participate in dividends (“Participating Securities”), and therefore utilizes the two-class method to calculate net income per share. These Participating Securities include the Series A redeemable convertible preferred stock. The two-class method requires |
Recent Accounting Standards | Recently Adopted Accounting Standards In May 20 17, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-09, Compensation-Stock Compensation (Topic 718), Scope of Modification Accounting , which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance on the types of changes to terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718, Compensation-Stock Compensation. ASU 2017-09 was effective for fiscal years and interim periods within those years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business , which amends the guidance of FASB Accounting Standards Codification Topic 805, “Business Combinations,” adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance was effective for annual and interim periods beginning after December 15, 2017. The impact from the adoption of this standard is dependent upon future transactions. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), Restricted Cash , which requires a statement of cash flows to explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 was effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. The adoption of this standard did not have a material impact on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The Company adopted this standard retrospectively and it had no material impact on the Company’s financial statements. Recent Accounting Pronouncements Not Yet Adopted In October 2018, the FASB issued ASU 2018-17, Consolidation (Topic 810), Targeted Improvements to Related Party Guidance for Variable Interest Entities , which addresses the cost and complexity of financial reporting associated with consolidation of variable interest entities (“VIE”). ASU 2018-17 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied on a retrospective basis as a cumulative-effect adjustment as of the date of adoption. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which eliminates certain disclosure requirements for fair value measurements for all entities, requires public entities to disclose certain new information and modifies some disclosure requirements. This ASU is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, and early adoption is permitted. An entity is permitted to early adopt either the entire standard or only the provisions that eliminate or modify requirements. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which addresses the income tax effects of items in accumulated other comprehensive income (“AOCI”) which were originally recognized in other comprehensive income, rather than in income from continuing operations. Specifically, it permits a reclassification from AOCI to retained earnings for the adjustment of deferred taxes due to the reduction of the historical corporate income tax rate to the newly enacted corporate income tax rate resulting from the U.S. tax law changes enacted in December 2017. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. The new guidance must be applied either on a prospective basis in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the U.S. tax law changes are recognized. The Company is evaluating the effect of adopting this new accounting guidance, but does not expect adoption will have a material impact on the Company’s financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment , which simplifies the accounting for goodwill impairment. The ASU requires impairment charges to be based on the first step in today’s two-step impairment test. ASU 2017-04 is effective for annual and interim impairment tests performed in periods beginning after December 15, 2021, and early adoption is permitted. Management does not expect the adoption of this guidance to have a significant impact on the Company’s financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short- term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases, to clarify how to apply certain aspects of the new leases standard. In July 2018, the FASB also issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, to give entities another option for transition and to provide lessors with a practical expedient to reduce the cost and complexity of implementing the new standard. The transition option allows entities to not apply the new leases standard in the comparative periods they present in their financial statements in the year of adoption. ASU 2016-02 is effective for emerging growth companies following private company adoption dates in fiscal years beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020, and early adoption is permitted. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While the Company expects the adoption of this standard to result in an increase to the reported assets and liabilities, it has not yet determined the full impact the adoption of this standard will have on its financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, “ Revenue from Contracts with Customers .” This new guidance will replace most existing GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 “ Revenue from Contracts with Customers: Deferral of the effective date,” which deferred by one year the effective date for the new revenue reporting standard for entities reporting under GAAP. In accordance with the deferral, this guidance will be effective for the Company beginning in the year ended December 31, 2019. This guidance can be applied either retrospectively to each period presented or as a cumulative effect adjustment as of the date of adoption. In December 2016, the FASB issued ASU 2016-20, “Revenue from Contracts with Customers, Technical Corrections and Improvements to Topic 606,” which made 12 additional technical corrections and improvements to the new revenue standard. In March 2016, the FASB issued ASU 2016-08, “ Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by the other party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing” , clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on accounting for an entity’s promise to grant a license. In May 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers, Narrow-Scope Improvements and Practical Expedients,” clarifying guidance on assessing collectability, presentation of sales taxes, noncash consideration, completed contracts and contract modifications. The effective date and transition requirements for ASU 2016-20, ASU 2016-08 and ASU 2016-10 are the same as the effective date and transition requirements for ASU 2014-09, which will be effective for the year ended December 31, 2019. The Company has elected to early adopt this guidance on January 1, 2019. The Company has selected the modified retrospective transition method of adoption and is in the process of completing its evaluation of the potential impacts of the new standard on its consolidated financial statements and disclosures. The Company does not expect there will be material changes to its revenue recognition. The Company expects that its revenue will continue to be recognized based on the usage by its customers, in the period the traffic traverses the Company’s network. Based on the Company’s evaluation to date, it expects the revenue related impact will not be material to the Company's consolidated financial statements. Based on the Company’s analysis of incremental contract acquisition costs, the Company does not expect any material changes to its accounting for sales commissions, which are currently expensed. The Company pays commissions over time and a corresponding requisite substantive service condition exists for the employee to receive the commission. The Company determined that the timing of the commission payments and the underlying service performed by the employee were commensurate. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows: As of December 31, 2016 2017 2018 Cash and cash equivalents $ 6,788 $ 37,627 $ 41,261 Restricted cash 240 243 240 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 7,028 $ 37,870 $ 41,501 |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows: As of December 31, 2016 2017 2018 Cash and cash equivalents $ 6,788 $ 37,627 $ 41,261 Restricted cash 240 243 240 Total cash, cash equivalents, and restricted cash shown in the statements of cash flows $ 7,028 $ 37,870 $ 41,501 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Operating Results of the Discontinued Operations Through the Date of the Spin-Off | The table below provides the operating results of the discontinued operations through the date of the Spin-Off for the year ended December 31, 2016: Year ended Revenue $ 83,156 Direct costs of network services and equipment (61,582) Operating expense (25,502) Depreciation and interest (949) Income tax benefit 1,805 Loss from discontinued operations $ (3,072) |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets Measured at Fair Value on a Recurring Basis | The following table summarizes the assets measured at fair value as of December 31, 2017 and 2018: Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Money market account (included in cash and cash equivalents $ 28,015 $ — $ — $ 28,015 Total financial assets $ 28,015 $ — $ — $ 28,015 There were no marketable securities as of December 31, 2017. Amortized cost or carrying value Unrealized gains Unrealized losses Fair value measurements on a recurring basis Level 1 Level 2 Level 3 Total Financial assets: Cash and cash equivalents: Money market account $ 8,194 $ — $ — $ 8,194 $ — $ — $ 8,194 U.S. Reverse repurchase agreements 26,000 — — — 26,000 — 26,000 Total included in cash and cash equivalents 34,194 — — 8,194 26,000 — 34,194 Marketable securities: U.S. treasury securities 17,402 — (2) 17,400 — 17,400 Total marketable securities 17,402 — (2) 17,400 — — 17,400 Total financial assets $ 51,596 $ — $ (2) $ 25,594 $ 26,000 $ — $ 51,594 |
Schedule of Contractual Maturities of Marketable Securities | The following table summarizes the contractual maturities of marketable securities as of December 31, 2018: Amortized cost Aggregate fair value Financial assets: Less than one year $ 17,402 $ 17,400 Total $ 17,402 $ 17,400 |
Financial Statement Components
Financial Statement Components (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Financial Statement Components [Abstract] | |
Schedule of Accounts Receivable, CABS Revenue, Allowance for Doubtful Accounts, Accrued Expenses and Other Current Liabilities | Accounts receivable, net of allowance for doubtful accounts consist of the following: As of December 31, 2017 2018 Trade accounts receivable $ 44,692 $ 13,620 Unbilled accounts receivable 8,653 11,174 Allowance for doubtful accounts (32,463) (906) Other accounts receivable 343 121 Total accounts receivable, net $ 21,225 $ 24,009 Components of allowance for doubtful accounts are as follows: Year Ended December 31, Allowance for doubtful accounts: 2017 2018 Balance, beginning of period $ 255 $ 189 Charged to bad debt expense 176 454 Deductions (1) (242) (421) Balance, end of period $ 189 $ 222 ________________________ (1) Write off of uncollectible accounts after all collection efforts have been exhausted. Year ended December 31, Allowance for CABS revenue: 2017 2018 Balance, beginning of period $ 22,316 $ 32,274 Charged to bad debt expense — 6 Write-off of previously outstanding and fully reserved billings related to settlement — (24,968) Billings deemed not probable of collection (1) 10,024 357 Revenue recognized from outstanding billings previously deemed uncollectible related to settlement — (6,268) Deductions (2) (66) (717) Balance, end of period $ 32,274 $ 684 ________________________ (1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account. (2) Write off of uncollectible accounts after all collection efforts have been exhausted. Year ended December 31, CABS revenue: 2016 2017 2018 Billed $ 19,838 $ 19,147 $ 13,325 Revenue recognized from current billings (2) 9,344 9,123 12,968 Billings deemed not probable of collection (1) $ 10,494 $ 10,024 $ 357 ________________________ (1) Represents amounts billed in the period but where collectibility is not probable based on customers collection experience. Amounts were charged to a contra-revenue account. |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of December 31, 2017 2018 Accrued expense $ 6,851 $ 8,292 Accrued compensation and benefits 5,237 7,323 Accrued sales, use, and telecom related taxes 3,030 4,742 Deferred rent, current portion 5 298 Other accrued expenses 602 738 Total accrued expenses and other current liabilities $ 15,725 $ 21,393 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment, Net | Property and equipment, net consisted of the following: As of December 31, 2017 2018 Furniture and fixtures $ 863 $ 1,741 Computer and office equipment 7,545 7,662 Telecommunications equipment 19,985 30,694 Leasehold improvements 453 2,438 Software development costs 15,517 16,293 Automobile 10 10 Total cost 44,373 58,838 Less—accumulated depreciation (29,427) (33,702) Total property and equipment, net $ 14,946 $ 25,136 |
Schedule of Depreciation Expense | The Company recognized depreciation expense, which includes amortization of capitalized software development costs, as follows: Year ended December 31, 2016 2017 2018 Cost of revenue $ 4,574 $ 4,315 $ 4,490 Research and development 29 81 161 Sales and marketing 21 27 51 General and administrative 627 450 568 Total depreciation expense $ 5,251 $ 4,873 $ 5,270 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets consisted of the following as of December 31, 2017: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (3,552) $ 6,844 20 Domain name and related trademarks 2,678 (2,643) 35 3–7 Licenses, amortizable 341 (341) — 2 Non-compete agreements 139 (139) — 2–5 Developed technology 775 (775) — 3 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (7,450) $ 7,643 Intangible assets consisted of the following as of December 31, 2018: Gross Accumulated Net Carrying Amortization (Years) Customer relationships $ 10,396 $ (4,071) $ 6,325 20 Domain name and related trademarks 2,678 (2,678) — 3–7 Licenses, amortizable 341 (341) — 2 Non-compete agreements 139 (139) — 2–5 Developed technology 775 (775) — 3 Licenses, indefinite lived 764 — 764 Indefinite Total intangible assets, net $ 15,093 $ (8,004) $ 7,089 |
Schedule of Future Estimated Amortization Expense | Future estimated amortization expense for definite lived intangible assets is as follows: As of December 31, 2018 2019 $ 520 2020 520 2021 520 2022 520 2023 520 Thereafter 3,725 $ 6,325 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Year ended December 31, 2016 2017 2018 CPaaS Revenue $ 117,078 $ 131,572 $ 164,415 Cost of revenue 71,218 75,859 94,296 Gross profit $ 45,860 $ 55,713 $ 70,119 Other Revenue $ 35,057 $ 31,383 $ 39,698 Cost of revenue 14,000 13,403 13,849 Gross profit $ 21,057 $ 17,980 $ 25,849 Consolidated Revenue $ 152,135 $ 162,955 $ 204,113 Cost of revenue 85,218 89,262 108,145 Gross profit $ 66,917 $ 73,693 $ 95,968 |
Schedule of Revenue by Geographical Area | Revenue by geographical area is detailed in the table below (which is determined based on the customer billing address): Year ended December 31, 2016 2017 2018 United States $ 151,618 $ 162,393 $ 203,567 International 517 562 546 Total $ 152,135 $ 162,955 $ 204,113 |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Reserved Shares of Common Stock for Issuance | The Company had reserved shares of Class A common stock for issuance under stock-based award agreements as follows: As of December 31, 2017 2018 Stock options issued and outstanding 3,659,791 1,937,370 Nonvested restricted stock units issued and outstanding — 324,252 Stock purchase warrants issued and outstanding 51,350 — Stock-based awards available for grant under the 2017 Plan 1,050,000 896,760 4,761,141 3,158,382 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Assumptions Used for Fair Value of Options Granted Using the Black-Scholes Pricing Model | The fair value of options granted is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions in the table below: Year ended December 31, 2016 2017 2018 Expected dividend yield —% —% —% Expected stock price volatility 44% 44%-49% 47% Average risk-free interest rate 1.3%-2.0% 1.9%-2.3% 2.5% Expected life 6.2 years 6.2 years 6.2 years Fair value of common stock $9.57-$9.60 $9.60-$20.83 $22.81 |
Summary of Stock Option Activity | The following summarizes the stock option activity for the year ended December 31, 2018: Number of Weighted- Weighted- Aggregate Outstanding as of December 31, 2017 3,659,791 $ 6.88 4.38 $ 59,436 Granted 17,988 22.81 Exercised (1,724,689) 6.40 56,313 Forfeited or cancelled (15,720) 12.10 Outstanding as of December 31, 2018 1,937,370 $ 7.41 4.00 $ 64,596 Options vested and exercisable at December 31, 2018 1,684,575 $ 6.66 3.44 $ 57,421 Options vested and expected to vest as of December 31, 2018 1,931,004 $ 7.39 3.99 $ 64,422 |
Summary of Restricted Stock Unit Activity | The following summarizes the restricted stock unit activity for the periods presented: Number of awards outstanding Weighted-average grant date fair value (per share) Nonvested RSUs as of December 31, 2017 — $ — Granted 342,423 26.89 Vested (11,000) 23.73 Forfeited or cancelled (7,171) 28.74 Nonvested RSUs as of December 31, 2018 324,252 $ 26.95 |
Schedule of Stock-Based Compensation Expense in Continuing Operations | The Company recognized total stock-based compensation expense in continuing operations as follows: Year ended December 31, 2016 2017 2018 Cost of revenue $ 61 $ 80 $ 114 Research and development 138 155 555 Sales and marketing 182 172 511 General and administrative (1) (2) 989 1,396 2,159 Total $ 1,370 $ 1,803 $ 3,339 ________________________ (1) On September 1, 2017, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 194,234 outstanding options to purchase common stock, which accelerated the vesting period and extended the exercise period, resulting in the recognition of $394 of additional stock compensation expense for the year ended December 31, 2017. (2) On December 21, 2018, the Company reached a separation agreement with an executive. The agreement resulted in a modification of the former employee ’ s 17,725 non-vested restricted stock units, which accelerated the vesting period, resulting in the recognition of $535 of additional stock compensation expense for the year ended December 31, 2018. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating Leases | Future minimum lease payments required under operating leases are as follows: As of December 31, 2018 2019 $ 5,044 2020 5,180 2021 5,254 2022 3,438 2023 1,399 Thereafter 2,343 $ 22,658 |
Schedule of Future Minimum Lease Receipts for Operating Lease | Future minimum sub-lease receipts required under the non-cancellable lease are as follows: As of December 31, 2018 2019 $ 1,042 2020 1,065 2021 1,089 2022 594 $ 3,790 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of (Provision) Benefit for Income Taxes from Continuing Operations | Benefit (provision) for income taxes from continuing operations consists of the following: Year ended December 31, 2016 2017 2018 Current: Federal $ 66 $ (448) $ 162 State (58) (302) (125) Total 8 (750) 37 Deferred: Federal 9,999 (5,983) 8,945 State 1,087 (185) 1,888 Total 11,086 (6,168) 10,833 Total benefit (provision) for income taxes $ 11,094 $ (6,918) $ 10,870 |
Schedule of Effective Income Tax Rate Reconciliation | The following table presents a reconciliation of the statutory federal tax rate and the Company’s effective tax rate for the years ended December 31, 2016, 2017 and 2018: Year ended December 31, 2016 2017 2018 Federal Tax Rate 34.0 % 34.0 % 21.0 % State Tax Rate 4.2 4.7 6.3 Non-deductible expenses 5.0 1.2 1.7 Research credit (2.3) (1.5) (13.6) Stock-based compensation (24.5) 0.1 (168.0) Change in valuation allowance (98.6) — — Deferred tax rate change 0.8 16.1 (0.7) Other 4.0 (0.9) (0.8) Total (77.4) % 53.7 % (154.1) % |
Significant Components of Deferred Tax Assets and Liabilities | The following table presents the significant components of the Company’s net deferred tax assets: As of December 31, 2017 2018 Deferred tax assets: Allowance for doubtful accounts $ 48 $ 57 Accrued liabilities 1,687 2,755 Deferred revenue 395 734 Intangibles 166 85 Stock-based compensation - deferred tax asset 4,668 3,486 Tax credits 2,071 2,690 Net operating losses 26 11,359 Other deferred tax assets 37 61 Total deferred tax assets 9,098 21,227 Less: valuation allowance — — Net deferred tax assets 9,098 21,227 Deferred tax liability: Property and equipment 1,797 2,993 Goodwill 582 729 Other liability 193 146 Total deferred tax liabilities 2,572 3,868 Net deferred tax asset $ 6,526 $ 17,359 |
Summary of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: Year ended December 31, 2017 2018 Unrecognized tax benefits—January 1, $ 671 $ 731 Gross increases—tax positions in prior period — 56 Gross increases—tax positions in current period 64 287 Lapse of statute of limitations (4) (28) Unrecognized tax benefits—December 31, $ 731 $ 1,046 |
Basic and Diluted Income per _2
Basic and Diluted Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted earnings per share, or EPS, are as follows: Year ended December 31, 2016 2017 2018 Income from Continuing Operations Income from continuing operations $ 25,430 $ 5,971 $ 17,923 Less: net income allocated to participating securities 3,355 644 — Income from continuing operations attributable to common stockholders $ 22,075 $ 5,327 $ 17,923 Income from continuing operations per share: Basic $ 1.89 $ 0.42 $ 0.96 Diluted $ 1.72 $ 0.37 $ 0.85 Loss from Discontinued Operations Loss from discontinued operations, net of income taxes $ (3,072) $ — $ — Less: loss allocated to participating securities (405) — — Loss from discontinued operations attributable to common stockholders $ (2,667) $ — $ — Loss from discontinued operations per share attributable to stockholders: Basic $ (0.23) $ — $ — Diluted $ (0.21) $ — $ — Net income Net income $ 22,358 $ 5,971 $ 17,923 Less: income allocated to participating securities 2,950 644 — Net income attributable to common stockholders $ 19,408 $ 5,327 $ 17,923 Net income per share: Basic $ 1.66 $ 0.42 $ 0.96 Diluted $ 1.51 $ 0.37 $ 0.85 Weighted Average Number of Common Shares Outstanding Basic 11,678,568 12,590,221 18,573,067 Dilutive effect of stock options, restricted stock units, and warrants 1,192,064 1,952,949 2,567,315 Diluted 12,870,632 14,543,170 21,140,382 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding, because the effect is anti-dilutive for the periods presented: Year ended December 31, 2016 2017 2018 Anti-dilutive Disclosure Series A redeemable convertible preferred stock outstanding 1,775,000 1,522,123 — Stock options issued and outstanding 237,185 50,604 — |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Schedule of Future Minimum Payments for Operating Leases | Future expected minimum payments under the amended lease are as follows: Amount 2019 $ 2,402 2020 3,543 2021 3,627 2022 3,845 2023 4,120 Thereafter 345 $ 17,882 |
Organization and Description _2
Organization and Description of Business (Details) | Nov. 09, 2017USD ($)vote$ / sharesshares | Dec. 31, 2018USD ($)votesegment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Nov. 14, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of operating segments | segment | 2 | ||||
Number of reportable segments | segment | 2 | ||||
Underwriting discounts and commissions | $ | $ 285,000 | $ 5,385,000 | $ 0 | ||
Secured Debt | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Long-term debt | $ | $ 38,500 | ||||
Common Class B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock voting rights, votes per share | vote | 10 | ||||
Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock voting rights, votes per share | vote | 1 | ||||
IPO [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Proceeds from the initial public offering, net of underwriting discounts | $ | $ 74,400,000 | ||||
Underwriting discounts and commissions | $ | $ 5,600,000 | ||||
IPO [Member] | Common Class B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reclassification of shares ratio | 1 | ||||
Common stock voting rights, votes per share | vote | 10 | ||||
IPO [Member] | Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reclassification of shares ratio | 1 | ||||
Common stock voting rights, votes per share | vote | 1 | ||||
IPO [Member] | New Common Class A | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | shares | 4,000,000 | ||||
Shares issued, price (in usd per share) | $ / shares | $ 20 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 41,261 | $ 37,627 | $ 6,788 | |
Restricted cash | 240 | 243 | 240 | |
Total cash, cash equivalents, and restricted cash shown in the statements of cash flows | $ 41,501 | $ 37,870 | $ 7,028 | $ 10,778 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Additional Information (Details) | Nov. 14, 2017USD ($) | Nov. 04, 2016 | Nov. 30, 2016 | Dec. 31, 2018USD ($)segmentreportingUnit | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Accounting Policies [Abstract] | ||||||
RRAs collateralized by deposits in form of Government Securities and Obligations as percentage of value | 102.00% | |||||
Concentration Risk [Line Items] | ||||||
Allowance for doubtful accounts | $ 906,000 | $ 32,463,000 | ||||
Unbilled accounts receivable | $ 11,174,000 | 8,653,000 | ||||
Estimated customer life | 3 years | |||||
Debt instrument, term | 5 years | 5 years | ||||
Amortization of debt issuance costs | $ 260,000 | $ 64,000 | 376,000 | $ 52,000 | ||
Number of reporting units | reportingUnit | 2 | |||||
Goodwill | $ 6,867,000 | 6,867,000 | ||||
Goodwill impairment charges | 0 | 0 | 0 | |||
Advertising costs | $ 953,000 | $ 464,000 | $ 197,000 | |||
Share-based compensation arrangement, requisite service period | 4 years | |||||
Number of operating segments | segment | 2 | |||||
Minimum | ||||||
Concentration Risk [Line Items] | ||||||
Customer arrangement, term | 2 years | |||||
Maximum | ||||||
Concentration Risk [Line Items] | ||||||
Customer arrangement, term | 3 years | |||||
Customer One | Accounts Receivable | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk percentage | 18.00% | 13.00% | ||||
Computer hardware and software | Minimum | ||||||
Concentration Risk [Line Items] | ||||||
Property and equipment, useful life | 2 years | |||||
Computer hardware and software | Maximum | ||||||
Concentration Risk [Line Items] | ||||||
Property and equipment, useful life | 5 years | |||||
Software development costs | ||||||
Concentration Risk [Line Items] | ||||||
Property and equipment, useful life | 3 years | |||||
Furniture and fixtures | Minimum | ||||||
Concentration Risk [Line Items] | ||||||
Property and equipment, useful life | 2 years | |||||
Furniture and fixtures | Maximum | ||||||
Concentration Risk [Line Items] | ||||||
Property and equipment, useful life | 7 years | |||||
Prepaid Expenses and Other Current Assets | ||||||
Concentration Risk [Line Items] | ||||||
Unamortized debt issuance costs | $ 136,000 | $ 175,000 | ||||
Long-term Debt | ||||||
Concentration Risk [Line Items] | ||||||
Unamortized debt issuance costs | $ 0 | $ 0 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) $ in Thousands | Nov. 30, 2016USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash distribution to Republic | $ 30,000 | $ 0 | $ 0 | $ 30,000 |
Net assets distributed to the stockholders | $ 28,899 | $ (28,899) | ||
Republic | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Common stock, conversion basis ratio | 1 |
Discontinued Operations - Opera
Discontinued Operations - Operating Results of the Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Loss from discontinued operations | $ 0 | $ 0 | $ (3,072) |
Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Revenue | 83,156 | ||
Direct costs of network services and equipment | (61,582) | ||
Operating expense | (25,502) | ||
Depreciation and interest | (949) | ||
Income tax benefit | 1,805 | ||
Loss from discontinued operations | $ (3,072) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets Measured at Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, amortized cost or carrying value | $ 41,261 | $ 37,627 | $ 6,788 |
Marketable securities, amortized cost or carrying value | 17,402 | ||
Marketable securities, unrealized gain | 0 | ||
Marketable securities, net unrealized losses | (2) | ||
Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, amortized cost or carrying value | 8,194 | ||
Cash and cash equivalents, unrealized gains | 0 | ||
Cash and cash equivalents, unrealized loss | 0 | ||
U.S. Reverse repurchase agreements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, amortized cost or carrying value | 26,000 | ||
Cash and cash equivalents, unrealized gains | 0 | ||
Cash and cash equivalents, unrealized loss | 0 | ||
Financial assets excluding marketable securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, amortized cost or carrying value | 34,194 | ||
Cash and cash equivalents, unrealized gains | 0 | ||
Cash and cash equivalents, unrealized loss | 0 | ||
U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities, amortized cost or carrying value | 17,402 | ||
Marketable securities, unrealized gain | 0 | ||
Marketable securities, net unrealized losses | (2) | ||
Financial assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets, fair value | 51,596 | ||
Financial assets, unrealized gain | 0 | ||
FinancialAssetsGrossUnrealizedLoss | (2) | ||
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 28,015 | ||
Marketable securities, fair value | 17,400 | ||
Fair Value, Measurements, Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 8,194 | ||
Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 26,000 | ||
Fair Value, Measurements, Recurring | Financial assets excluding marketable securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 34,194 | ||
Fair Value, Measurements, Recurring | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities, fair value | 17,400 | ||
Fair Value, Measurements, Recurring | Financial assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets, fair value | 51,594 | 28,015 | |
Level 1 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 28,015 | ||
Marketable securities, fair value | 17,400 | ||
Level 1 | Fair Value, Measurements, Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 8,194 | ||
Level 1 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Level 1 | Fair Value, Measurements, Recurring | Financial assets excluding marketable securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 8,194 | ||
Level 1 | Fair Value, Measurements, Recurring | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities, fair value | 17,400 | ||
Level 1 | Fair Value, Measurements, Recurring | Financial assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets, fair value | 25,594 | 28,015 | |
Level 2 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Marketable securities, fair value | 0 | ||
Level 2 | Fair Value, Measurements, Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Level 2 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 26,000 | ||
Level 2 | Fair Value, Measurements, Recurring | Financial assets excluding marketable securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 26,000 | ||
Level 2 | Fair Value, Measurements, Recurring | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities, fair value | |||
Level 2 | Fair Value, Measurements, Recurring | Financial assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets, fair value | 26,000 | 0 | |
Level 3 | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Marketable securities, fair value | 0 | ||
Level 3 | Fair Value, Measurements, Recurring | Money market account | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Level 3 | Fair Value, Measurements, Recurring | U.S. Reverse repurchase agreements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Level 3 | Fair Value, Measurements, Recurring | Financial assets excluding marketable securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents, fair value | 0 | ||
Level 3 | Fair Value, Measurements, Recurring | U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Marketable securities, fair value | 0 | ||
Level 3 | Fair Value, Measurements, Recurring | Financial assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total financial assets, fair value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Contractual Maturities of Marketable Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized cost | $ 17,402,000 | ||
Aggregate fair value | 17,400,000 | ||
Maturities of marketable securities | 18,000,000 | $ 0 | $ 0 |
Interest earned on marketable securities | 77,000 | $ 0 | |
U.S. treasury securities | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Amortized cost | 17,402,000 | ||
Aggregate fair value | $ 17,400,000 |
Financial Statement Component_2
Financial Statement Components - Accounts Receivable, Net of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Statement Components [Abstract] | ||
Trade accounts receivable | $ 13,620 | $ 44,692 |
Unbilled accounts receivable | 11,174 | 8,653 |
Allowance for doubtful accounts | (906) | (32,463) |
Other accounts receivable | 121 | 343 |
Total accounts receivable, net | $ 24,009 | $ 21,225 |
Financial Statement Component_3
Financial Statement Components - Allowance For Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Revenue | $ 204,113 | $ 162,955 | $ 152,135 |
Carrier Access Billing (CAB) | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Billings deemed not probable of collection | 357 | 10,024 | 10,494 |
Revenue recognized as a result of settlement agreement | (6,268) | ||
Billed | 13,325 | 19,147 | 19,838 |
Revenue | 12,968 | 9,123 | 9,344 |
Accounts Receivable, Excluding Carrier Access Billing (CAB) | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, beginning of period | 189 | 255 | |
Charged to bad debt expense | 454 | 176 | |
Deductions | (421) | (242) | |
Balance, end of period | 222 | 189 | 255 |
Carrier Access Billing (CAB) | |||
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Balance, beginning of period | 32,274 | 22,316 | |
Charged to bad debt expense | 6 | 0 | |
Write-off of previously outstanding and fully reserved billings related to settlement | (24,968) | 0 | |
Billings deemed not probable of collection | 357 | 10,024 | |
Revenue recognized as a result of settlement agreement | (6,268) | 0 | |
Deductions | (717) | (66) | |
Balance, end of period | $ 684 | $ 32,274 | $ 22,316 |
Financial Statement Component_4
Financial Statement Components - Additional Information (Details) - USD ($) $ in Thousands | Feb. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Carrier Access Billing (CAB) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Settlement agreement lump sum payment | $ 4,400 | ||
Revenue recognized as a result of settlement agreement | $ 6,268 | ||
Carrier Access Billing (CAB) | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Write-off of previously outstanding and fully reserved billings related to settlement | 24,968 | $ 0 | |
Revenue recognized as a result of settlement agreement | $ 6,268 | $ 0 |
Financial Statement Component_5
Financial Statement Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Statement Components [Abstract] | ||
Accrued expense | $ 8,292 | $ 6,851 |
Accrued compensation and benefits | 7,323 | 5,237 |
Accrued sales, use, and telecom related taxes | 4,742 | 3,030 |
Deferred rent, current portion | 298 | 5 |
Other accrued expenses | 738 | 602 |
Total accrued expenses and other current liabilities | $ 21,393 | $ 15,725 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 58,838 | $ 44,373 |
Less—accumulated depreciation | (33,702) | (29,427) |
Total property and equipment, net | 25,136 | 14,946 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,741 | 863 |
Computer and office equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,662 | 7,545 |
Telecommunications equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 30,694 | 19,985 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,438 | 453 |
Software development costs | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 16,293 | 15,517 |
Automobile | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 10 | $ 10 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Unamortized software development costs | $ 3,271 | $ 3,795 | |
Amortization of capitalized software development costs | 1,801 | 2,133 | $ 2,820 |
Capitalized software impairments | 158 | 81 | 91 |
Capitalized software development costs, additions | $ 2,028 | $ 2,942 | $ 2,230 |
Software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life | 3 years |
Property and Equipment - Deprec
Property and Equipment - Depreciation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Depreciation Expense [Line Items] | |||
Depreciation | $ 5,270 | $ 4,873 | $ 5,251 |
Cost of revenue | |||
Depreciation Expense [Line Items] | |||
Depreciation | 4,490 | 4,315 | 4,574 |
Research and development | |||
Depreciation Expense [Line Items] | |||
Depreciation | 161 | 81 | 29 |
Sales and marketing | |||
Depreciation Expense [Line Items] | |||
Depreciation | 51 | 27 | 21 |
General and administrative | |||
Depreciation Expense [Line Items] | |||
Depreciation | $ 568 | $ 450 | $ 627 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | |||
Accumulated amortization | $ (7,450) | $ (8,004) | |
Finite-lived intangible assets, net | 6,325 | ||
Gross amount | 15,093 | 15,093 | |
Net carrying value | 7,643 | 7,089 | |
Licenses | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Licenses, indefinite lived | 764 | 764 | |
Customer relationships | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | 10,396 | 10,396 | |
Accumulated amortization | (3,552) | (4,071) | |
Finite-lived intangible assets, net | $ 6,844 | 6,325 | |
Amortization period | 20 years | 20 years | |
Domain name and related trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 2,678 | 2,678 | |
Accumulated amortization | (2,643) | (2,678) | |
Finite-lived intangible assets, net | $ 35 | 0 | |
Domain name and related trademarks | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 3 years | 3 years | |
Domain name and related trademarks | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 7 years | 7 years | |
Licenses | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 341 | 341 | |
Accumulated amortization | (341) | (341) | |
Finite-lived intangible assets, net | $ 0 | 0 | |
Amortization period | 2 years | 2 years | |
Non-compete agreements | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 139 | 139 | |
Accumulated amortization | (139) | (139) | |
Finite-lived intangible assets, net | $ 0 | 0 | |
Non-compete agreements | Minimum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 2 years | 2 years | |
Non-compete agreements | Maximum | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization period | 5 years | 5 years | |
Developed technology | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, gross | $ 775 | 775 | |
Accumulated amortization | (775) | (775) | |
Finite-lived intangible assets, net | $ 0 | $ 0 | |
Amortization period | 3 years | 3 years |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 554,000 | $ 839,000 | $ 891,000 |
Weighted average amortization period | 19 years | ||
Impairment of indefinite-lived intangible assets | $ 0 | 0 | |
Impairment of finite-lived intangible assets | $ 0 | $ 0 | $ 695,000 |
Intangible Assets - Future Esti
Intangible Assets - Future Estimated Amortization Expense (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2,019 | $ 520 |
2,020 | 520 |
2,021 | 520 |
2,022 | 520 |
2,023 | 520 |
Thereafter | 3,725 |
Finite-lived intangible assets, net | $ 6,325 |
Debt (Details)
Debt (Details) - USD ($) | Nov. 04, 2016 | Nov. 30, 2016 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Nov. 14, 2017 |
Debt Instrument [Line Items] | ||||||
Debt instrument, term | 5 years | 5 years | ||||
Cost of assets under capital leases | $ 1,951,000 | $ 1,951,000 | ||||
Accumulated depreciation of assets under capital leases | $ 1,884,000 | 1,855,000 | ||||
Remaining payments due on capital lease | $ 0 | |||||
Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 25,000,000 | |||||
Debt outstanding | 0 | 0 | ||||
Available borrowing capacity | 25,000,000 | |||||
Swing Line | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 1,000,000 | |||||
Letters of credit | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | 2,500,000 | |||||
Term loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 40,000,000 | |||||
Debt outstanding | $ 38,500 | |||||
Term loan | Revolving Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt outstanding | $ 0 | $ 0 |
Segment and Geographic Inform_3
Segment and Geographic Information - Reconciliation of Segment Profit (Loss) (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Revenue | $ 204,113 | $ 162,955 | $ 152,135 |
Cost of revenue | 108,145 | 89,262 | 85,218 |
Gross profit | 95,968 | 73,693 | 66,917 |
CPaaS | |||
Segment Reporting Information [Line Items] | |||
Revenue | 164,415 | 131,572 | 117,078 |
Cost of revenue | 94,296 | 75,859 | 71,218 |
Gross profit | 70,119 | 55,713 | 45,860 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 39,698 | 31,383 | 35,057 |
Cost of revenue | 13,849 | 13,403 | 14,000 |
Gross profit | $ 25,849 | $ 17,980 | $ 21,057 |
Segment and Geographic Inform_4
Segment and Geographic Information - Reconciliation of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 204,113 | $ 162,955 | $ 152,135 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 203,567 | 162,393 | 151,618 |
International | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 546 | $ 562 | $ 517 |
Stockholders' (Deficit) Equit_2
Stockholders' (Deficit) Equity - Additional Information (Details) | Nov. 09, 2017 | Oct. 19, 2017 |
Equity [Abstract] | ||
Stock split conversion ratio | 2.5 | 2.5 |
Stockholders' (Deficit) Equit_3
Stockholders' (Deficit) Equity - Redeemable Convertible Preferred Stock (Details) | Nov. 09, 2017$ / sharesshares | Oct. 19, 2017 | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015shares | Mar. 24, 2011shares | Feb. 22, 2011$ / sharesshares | Jan. 01, 2010shares |
Class of Stock [Line Items] | |||||||||
Series A redeemable convertible preferred stock, shares authorized (in shares) | shares | 1,200,000 | 5,000,000 | |||||||
Series A redeemable convertible preferred stock, shares issued (in shares) | shares | 710,000 | 46,093 | 663,907 | ||||||
Series A redeemable convertible preferred stock, shares outstanding (in shares) | shares | 0 | 0 | 710,000 | 710,000 | |||||
Series A redeemable convertible preferred stock, par value (in usd per share) | $ / shares | $ 30.8358 | ||||||||
Stock split conversion ratio | 2.5 | 2.5 | |||||||
Liquidation preference multiple | 0.08 | ||||||||
Temporary equity, redemption period | 60 days | ||||||||
Preferred stock, dividends declared (in usd per share) | $ / shares | $ 0 | $ 0 | $ 0 | ||||||
Old Common Class A | |||||||||
Class of Stock [Line Items] | |||||||||
Stock split conversion ratio | 2.5 | ||||||||
Shares converted (in shares) | shares | 1,775,000 | ||||||||
Series A Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Convertible preferred stock, conversion price (in usd per share) | $ / shares | $ 12.3343 | ||||||||
Shares issued, price (in usd per share) | $ / shares | $ 30.8358 |
Stockholder's (Deficit) Equity
Stockholder's (Deficit) Equity - Preferred Stock (Details) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 | Nov. 09, 2017 |
Equity [Abstract] | |||
Preferred stock, shares authorized (in shares) | 1,000,000 | 10,000,000 | |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Stockholder's (Deficit) Equit_2
Stockholder's (Deficit) Equity - Common Stock (Details) | Nov. 09, 2017$ / sharesshares | Oct. 19, 2017 | Dec. 31, 2018vote$ / sharesshares | Dec. 31, 2017$ / sharesshares | Dec. 31, 2016vote$ / sharesshares |
Class of Stock [Line Items] | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | ||||
Stock split conversion ratio | 2.5 | 2.5 | |||
Common stock, shares authorized (in shares) | 120,000,000 | ||||
Common stock, dividends declared (in usd per share) | $ / shares | $ 0 | ||||
Old Common Class A | |||||
Class of Stock [Line Items] | |||||
Common stock voting rights, votes per share | vote | 1 | ||||
Common stock, shares issued (in shares) | 11,779,975 | ||||
Common stock, shares outstanding (in shares) | 11,779,975 | ||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | ||||
Stock split conversion ratio | 2.5 | ||||
Shares converted (in shares) | 1,775,000 | ||||
Old Common Class B | |||||
Class of Stock [Line Items] | |||||
Common stock voting rights, votes per share | vote | 0 | ||||
Common stock, shares issued (in shares) | 18,590 | ||||
Common stock, shares outstanding (in shares) | 18,590 | ||||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | ||||
New Common Class B | |||||
Class of Stock [Line Items] | |||||
Shares converted (in shares) | 1,775,000 | ||||
Common Class B | |||||
Class of Stock [Line Items] | |||||
Common stock voting rights, votes per share | vote | 10 | ||||
Common stock, shares issued (in shares) | 6,510,732 | 13,440,725 | |||
Common stock, shares outstanding (in shares) | 6,510,732 | 13,440,725 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 20,000,000 | 20,000,000 | |||
Common Class A | |||||
Class of Stock [Line Items] | |||||
Common stock voting rights, votes per share | vote | 1 | ||||
Common stock, shares issued (in shares) | 12,912,747 | 4,197,831 | |||
Common stock, shares outstanding (in shares) | 12,912,747 | 4,197,831 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.001 | $ 0.001 | |||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Stockholder's (Deficit) Equit_3
Stockholder's (Deficit) Equity - Option to Purchase Additional Shares (Details) | Nov. 28, 2017shares |
Over-Allotment Option | Common Class A | |
Class of Stock [Line Items] | |
Underwriters exercise of options (in shares) | 162,991 |
Stockholder's (Deficit) Equit_4
Stockholder's (Deficit) Equity - Stock Purchase Warrants (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2011 | Dec. 20, 2010 | |
Class of Stock [Line Items] | ||||
Common stock reserved for future issuance (in shares) | 4,761,141 | 3,158,382 | ||
Stock Purchase Warrant | ||||
Class of Stock [Line Items] | ||||
Warrants, shares exercisable (in shares) | 30,470 | |||
Warrants, exercise price (in usd per share) | $ 5.80 | |||
Number of warrant exercised | 15,844 | |||
Warrants outstanding (in shares) | 0 | |||
Stock Purchase Warrant, Expire March 25, 2018 | ||||
Class of Stock [Line Items] | ||||
Warrants, shares exercisable (in shares) | 43,847 | |||
Warrants, exercise price (in usd per share) | $ 0.001 | |||
Warrants outstanding (in shares) | 39,000 | 0 | ||
Stock Purchase Warrant, Expire February 22, 2018 | ||||
Class of Stock [Line Items] | ||||
Warrants, shares exercisable (in shares) | 9,846 | |||
Warrants, exercise price (in usd per share) | $ 5.80 | |||
Warrants outstanding (in shares) | 9,846 | 0 | ||
Stock Purchase Warrant, Expire January 19, 2018 | ||||
Class of Stock [Line Items] | ||||
Warrants, shares exercisable (in shares) | 4,531 | |||
Warrants, exercise price (in usd per share) | $ 6.57 | |||
Warrants outstanding (in shares) | 2,504 | 0 |
Stockholder's (Deficit) Equit_5
Stockholder's (Deficit) Equity - Spin-Off (Details) - Republic | Nov. 30, 2016 |
Class of Stock [Line Items] | |
Common stock, conversion basis ratio | 1 |
Common Class A | |
Class of Stock [Line Items] | |
Common stock, conversion basis ratio | 1 |
Common Class B | |
Class of Stock [Line Items] | |
Common stock, conversion basis ratio | 1 |
Stockholders' (Deficit) Equit_4
Stockholders' (Deficit) Equity - Reserved Shares of Common Stock for Issuance (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 3,158,382 | 4,761,141 |
Stock options issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 1,937,370 | 3,659,791 |
Nonvested restricted stock units issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 324,252 | 0 |
Stock purchase warrants issued and outstanding | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 0 | 51,350 |
Stock-based awards available for grant under the 2017 Plan | ||
Class of Stock [Line Items] | ||
Common stock reserved for future issuance (in shares) | 896,760 | 1,050,000 |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Nov. 09, 2017 | Aug. 24, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 3,158,382 | 3,158,382 | 4,761,141 | ||||
Share-based compensation arrangement, requisite service period | 4 years | ||||||
Estimated grant date fair value of options vested | $ 979 | $ 1,299 | $ 2,082 | ||||
Unrecognized cost for stock based compensation | $ 1,197 | 1,197 | |||||
Unrecognized compensation cost related to non-vested RSUs | $ 6,769 | $ 6,769 | |||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized cost for stock based compensation, period for recognition (in years) | 2 years 14 days | ||||||
Restricted Stock Units (RSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 324,252 | 324,252 | 0 | ||||
Vesting percentage | 25.00% | ||||||
Share-based compensation arrangement, requisite service period | 4 years | ||||||
Unrecognized cost for stock based compensation, period for recognition (in years) | 3 years 2 months 19 days | ||||||
2010 Equity Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average grant-date fair value of stock options granted (in usd per share) | $ 11.10 | $ 7.72 | $ 4.06 | ||||
2010 Equity Compensation Plan | Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 3,466,275 | ||||||
Vesting period (in years) | 4 years | ||||||
Contractual life (in years) | 10 years | ||||||
2017 Equity Compensation Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock reserved for future issuance (in shares) | 1,050,000 | ||||||
Common stock reserved for future issuance, percent increase | 5.00% | ||||||
Increase in shares available for grant (in shares) | 200,000 |
Stock Based Compensation - Fair
Stock Based Compensation - Fair Value of Options Granted Using the Black-Scholes Pricing Model (Details) - Employee Stock Option - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Expected stock price volatility | 47.00% | 44.00% | ||
Average risk-free interest rate | 2.50% | |||
Average risk-free interest rate, minimum | 1.90% | 1.30% | ||
Average risk-free interest rate, maximum | 2.30% | 2.00% | ||
Expected life (in years) | 6 years 2 months 12 days | 6 years 2 months 12 days | 6 years 2 months 12 days | |
Fair value of common stock (in usd per share) | $ 22.81 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected stock price volatility | 44.00% | |||
Fair value of common stock (in usd per share) | $ 9.60 | $ 9.57 | ||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected stock price volatility | 49.00% | |||
Fair value of common stock (in usd per share) | $ 20.83 | $ 9.60 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Options vested and expected to vest (in shares) | 1,931,004 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted average exercise price, options vested and expected to vest (in usd per share) | $ 7.39 | |||
Weighted average remaining contract life, options vested and expected to vest | 3 years 11 months 26 days | |||
Aggregate intrinsic value, options vested and expected to vest | $ 64,422 | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||||
Number of options outstanding, beginning balance (in shares) | 3,659,791 | 3,659,791 | ||
Number of options, granted (in shares) | 17,988 | |||
Number of options exercised (in shares) | (1,724,689) | |||
Number of options, forfeited or cancelled (in shares) | (15,720) | |||
Number of options outstanding, ending balance (in shares) | 1,937,370 | |||
Number of options outstanding, options vested and exercisable (in shares) | 1,684,575 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||||
Weighted-average exercise price, beginning balance (in usd per share) | $ 6.88 | $ 6.88 | ||
Weighted-average exercise price, granted (in usd per share) | 22.81 | |||
Weighted-average exercise price, exercised (in usd per share) | 6.40 | |||
Weighted-average exercise price, forfeited or cancelled (in usd per share) | 12.10 | |||
Weighted-average exercise price, ending balance (in usd per share) | 7.41 | |||
Weighted-average exercise price, options vested and exercisable (in usd per share) | $ 6.66 | |||
Weighted-average remaining contract life, options outstanding (in years) | 4 years | 4 years 4 months 17 days | ||
Weighted-average remaining contract life, options vested and exercisable (in years) | 3 years 5 months 8 days | |||
Aggregate intrinsic value, options outstanding | $ 64,596 | $ 59,436 | ||
Aggregate intrinsic value, options exercised | 56,313 | |||
Aggregate intrinsic value, options vested and exercisable | $ 57,421 |
Stock Based Compensation - Rest
Stock Based Compensation - Restricted Stock Unit Activity (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | |
Number of nonvested RSUs outstanding, beginning balance (in shares) | shares | 0 |
Number of nonvested RSUs, granted (in shares) | shares | 342,423 |
Number of nonvested RSUs, vested (in shares) | shares | (11,000) |
Number of nonvested RSUs, forfeited or cancelled (in shares) | shares | (7,171) |
Number of nonvested RSUs outstanding, ending balance (in shares) | shares | 324,252 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted-average grant date fair value, beginning balance (in usd per share) | $ / shares | $ 0 |
Weighted average grant-date fair value of nonvested RSUS, granted (in usd per share) | $ / shares | 26.89 |
Weighted-average grant date fair value of nonvested RSUs, vested (in usd per share) | $ / shares | 23.73 |
Weighted-average grant date fair value of nonvested restricted RSUs, forfeited or cancelled (in usd per share) | $ / shares | 28.74 |
Weighted-average grant date fair value, ending balance (in usd per share) | $ / shares | $ 26.95 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 21, 2018 | Sep. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 3,339 | $ 1,803 | $ 1,370 | ||
Cost of revenue | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 114 | 80 | 61 | ||
Research and development | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 555 | 155 | 138 | ||
Sales and marketing | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 511 | 172 | 182 | ||
General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | 2,159 | 1,396 | $ 989 | ||
Separation agreement with an executive | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Number of outstanding options modified (in shares) | 17,725 | 194,234 | |||
Separation agreement with an executive | General and administrative | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 535 | $ 394 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 20, 2018ft² | Mar. 27, 2018ft² | Jan. 12, 2018ft² | Nov. 30, 2016ft² | |
Lessee, Lease, Description [Line Items] | |||||||
Office space (in square foot) | ft² | 2,605 | 5,930 | 40,035 | 40,657 | |||
Term of lease (in months) | 12 months | 60 months | 84 months | ||||
Rent expense | $ 4,331 | $ 3,327 | $ 2,003 | ||||
Annual minimum commitments | $ 1,200 | ||||||
Term of agreement (in years) | 5 years | ||||||
Non-cancellable purchase obligation | $ 4,782 | ||||||
Non-cancellable purchase obligation, fulfilled within a year | 4,070 | ||||||
General and administrative | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Reduction of rent expense | $ 1,005 | $ 949 | $ 47 | ||||
Operating Lease | Raleigh, NC | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Office space (in square foot) | ft² | 181,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 5,044 |
2,020 | 5,180 |
2,021 | 5,254 |
2,022 | 3,438 |
2,023 | 1,399 |
Thereafter | 2,343 |
Future minimum payments due, total | $ 22,658 |
Commitments and Contingencies_3
Commitments and Contingencies - Future Minimum Lease Receipts (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 1,042 |
2,020 | 1,065 |
2,021 | 1,089 |
2,022 | 594 |
Future minimum lease receipts, total | $ 3,790 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Matching contributions | $ 1,117 | $ 806 | $ 716 |
Income Taxes - Components of (P
Income Taxes - Components of (Provision) Benefit for Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Current | |||
Federal | $ 162 | $ (448) | $ 66 |
State | (125) | (302) | (58) |
Total | 37 | (750) | 8 |
Deferred: | |||
Federal | 8,945 | (5,983) | 9,999 |
State | 1,888 | (185) | 1,087 |
Total | 10,833 | (6,168) | 11,086 |
Total (provision) benefit for income taxes | $ 10,870 | $ (6,918) | $ 11,094 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal | 21.00% | 34.00% | 34.00% |
State | 6.30% | 4.70% | 4.20% |
Non-deductible expenses | 1.70% | 1.20% | 5.00% |
Research credit | (13.60%) | (1.50%) | (2.30%) |
Stock-based compensation | (168.00%) | 0.10% | (24.50%) |
Change in valuation allowance | 0.00% | 0.00% | (98.60%) |
Deferred tax rate change | (0.70%) | 16.10% | 0.80% |
Other | (0.80%) | (0.90%) | 4.00% |
Total | (154.10%) | 53.70% | (77.40%) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets | ||
Allowance for doubtful accounts | $ 57 | $ 48 |
Accrued liabilities | 2,755 | 1,687 |
Deferred revenue | 734 | 395 |
Intangibles | 85 | 166 |
Stock-based compensation | 3,486 | 4,668 |
Tax credits | 2,690 | 2,071 |
Net operating losses | 11,359 | 26 |
Other deferred tax assets | 61 | 37 |
Total deferred tax assets | 21,227 | 9,098 |
Less: valuation allowance | 0 | 0 |
Net deferred tax assets | 21,227 | 9,098 |
Deferred tax liability | ||
Property and equipment | 2,993 | 1,797 |
Goodwill | 729 | 582 |
Other liability | 146 | 193 |
Total deferred tax liabilities | 3,868 | 2,572 |
Net deferred tax asset | $ 17,359 | $ 6,526 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Loss Carryforwards [Line Items] | |
Federal tax credits | $ 3,691 |
Unrecognized tax benefits that would impact effective tax rate | 1,046 |
Federal | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | 45,148 |
State | |
Operating Loss Carryforwards [Line Items] | |
Net operating loss carryforwards | $ 36,499 |
Income Taxes - Summary of Unrec
Income Taxes - Summary of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning balance | $ 731 | $ 671 |
Gross increases—tax positions in prior period | 56 | 0 |
Gross increases—tax positions in current period | 287 | 64 |
Lapse of statute of limitations | (28) | (4) |
Unrecognized tax benefits, ending balance | $ 1,046 | $ 731 |
Related Parties (Details)
Related Parties (Details) - Affiliated Entity - Republic - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Related Party Transaction [Line Items] | |||
Amount collected on behalf | $ 9,213,000 | ||
Due to related parties | $ 0 | ||
Transition Services Agreement | |||
Related Party Transaction [Line Items] | |||
Service term, period from spin-off | 2 years | ||
Revenue from related parties | $ 80,000 | $ 575,000 | $ 134,000 |
Accounts receivable, related parties | $ 0 | 15,000 | |
Facilities Sharing Agreement | |||
Related Party Transaction [Line Items] | |||
Sublease term | 63 months | ||
Due from related parties | $ 0 | 0 | |
Rental payments received | 1,005,000 | 949,000 | 47,000 |
Tax Sharing Agreement | |||
Related Party Transaction [Line Items] | |||
Due from related parties | 0 | 0 | |
Due to related parties | 0 | 0 | |
Master Services Agreement | |||
Related Party Transaction [Line Items] | |||
Revenue from related parties | 3,884,000 | 2,451,000 | $ 173,000 |
Accounts receivable, related parties | $ 327,000 | $ 311,000 |
Basic and Diluted Income per _3
Basic and Diluted Income per Common Share - Components of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income from Continuing Operations | |||
Income from continuing operations | $ 17,923 | $ 5,971 | $ 25,430 |
Less: net income allocated to participating securities | 0 | 644 | 3,355 |
Income from continuing operations attributable to common stockholders | $ 17,923 | $ 5,327 | $ 22,075 |
Income from continuing operations per share: | |||
Basic (in usd per share) | $ 0.96 | $ 0.42 | $ 1.89 |
Diluted (in usd per share) | $ 0.85 | $ 0.37 | $ 1.72 |
Loss from Discontinued Operations | |||
Loss from discontinued operations, net of income taxes | $ 0 | $ 0 | $ (3,072) |
Less: loss allocated to participating securities | 0 | 0 | (405) |
Loss from discontinued operations attributable to common stockholders | $ 0 | $ 0 | $ (2,667) |
Loss from discontinued operations per share attributable to stockholders: | |||
Basic (in usd per share) | $ 0 | $ 0 | $ (0.23) |
Diluted (in usd per share) | $ 0 | $ 0 | $ (0.21) |
Net (loss) income | |||
Net (loss) income | $ 17,923 | $ 5,971 | $ 22,358 |
Less: (loss) income allocated to participating securities | 0 | 644 | 2,950 |
Net income attributable to common stockholders | $ 17,923 | $ 5,327 | $ 19,408 |
Net (loss) income per share: | |||
Basic (in usd per share) | $ 0.96 | $ 0.42 | $ 1.66 |
Diluted (in usd per share) | $ 0.85 | $ 0.37 | $ 1.51 |
Weighted Average Number of Common Shares Outstanding | |||
Basic (in shares) | 18,573,067 | 12,590,221 | 11,678,568 |
Dilutive effect of stock options, restricted stock units, and warrants (in shares) | 2,567,315 | 1,952,949 | 1,192,064 |
Diluted (in shares) | 21,140,382 | 14,543,170 | 12,870,632 |
Basic and Diluted Income per _4
Basic and Diluted Income per Common Share - Antidilutive Securities Excluded from the Computation (Details) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Series A redeemable convertible preferred stock outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of weighted-average common shares outstanding | 0 | 1,522,123 | 1,775,000 |
Stock options issued and outstanding | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from calculation of weighted-average common shares outstanding | 0 | 50,604 | 237,185 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Jan. 01, 2019USD ($)ft² | Dec. 31, 2018USD ($) | Jul. 20, 2018ft² | Mar. 27, 2018ft² | Jan. 12, 2018ft² | Nov. 30, 2016ft² |
Subsequent Event [Line Items] | ||||||
Office space (in square foot) | ft² | 2,605 | 5,930 | 40,035 | 40,657 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||
2,019 | $ 5,044 | |||||
2,020 | 5,180 | |||||
2,021 | 5,254 | |||||
2,022 | 3,438 | |||||
2,023 | 1,399 | |||||
Thereafter | 2,343 | |||||
Future minimum payments due, total | $ 22,658 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Office space (in square foot) | ft² | 117,719 | |||||
Increase of office space (in square foot) | ft² | 30,114 | |||||
Lessee, operating lease, renewal term | 5 years | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||
2,019 | $ 2,402 | |||||
2,020 | 3,543 | |||||
2,021 | 3,627 | |||||
2,022 | 3,845 | |||||
2,023 | 4,120 | |||||
Thereafter | 345 | |||||
Future minimum payments due, total | $ 17,882 | |||||
Spin-off | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Office space (in square foot) | ft² | 40,657 | |||||
Lessee, operating lease, renewal term | 18 months | |||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||||
Leasee, operating lease, additional renewal term | 5 years |